Appellees Brief — George Campbell Painting Corp. v. Reid

Supreme Court brief1968

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~ IN THE APR 11° 1968

+ Supreme Court of the nit States

OCTOBER TERM, 1967 IGHN F. DAMS, OLE

No. 673

GEORGE CAMPBELL PAINTING CORP.,

ee ; Appellant,

agains

* WILLIAM REID, FRANCIS V. MADIGAN, IRA S. ROBBINS,

Members of the New York City Housing Authority, and THE

NEW YORK CITY HOUSING AUTHORITY,

Appellees.

GEORGE vieatinnen PAINTING CORP.,

Appellant,

agains

“WILLIAM REID, FRANCIS V. MADIGAN, IRA S. ROBBINS,

Members of the New York City Housing Authority, and THE a |

NEW YORK CITY HOUSING AUTHORITY,

Appellees. |

On APPEAL FROM THE COURT OF APPEALS OF THE

a STATE oF NEw YorK

BRIEF OF APPELLEE NEW YORK CITY

HOUSING AUTHORITY —

Harry Levy,

Attorney for Appellee,

. . New York City Housing Authority,

250. Broadway,

New York, New York 10017.

Pau W. HEssEL,

_-I. STaNLeEy STEIN,

Of Counsel.

LS EE EL A ET a

‘Qi 249 Press of Fremont Payae, Inc., 80 Washington St., N. Y.—BOwling Green 9-8153

TABLE OF CONTENTS

Statement of Facts ... Suaseere Gare . PENIS SE

Summary of Argument ......... \ckieankenbes sees

Argument I—A public contractor should be held to

. requirements and standards of candor and dis-

closure of information bearing upon his qualifi-

cations and responsibility at least as extensive as

those which may constitutionally be imposed upon

public employees. Accordingly, if waiver of the

* Fifth Amendment privilege under threat of dis-

missal may constitutionally be required of public

employees, «so facto the requirement of such ~

waiver by a public contractor under threat of

-. disqualification from bidding should be held con-

.Stitutionally .permissible ........ viekcesanee te’

constitutionally be required to waive immu-

nity and to furnish information relevant to

COUET GUTIORINGD cin v cc ccc cccvcnvessesesss

_B. Public Authorities Léw, Section 2601 is no less

- designed to obtain information as to qualifi-

cations than are similar statutes relating to

Se SOE ic ob teks cn ecsecscaeaucinss

' C. Appellant’s assertion that the Grand Jury tes-

timony ,of its officer, if given, would not be

available to evaluate its qualifications i is with-

Ce rr Ee rrr reer er eee

D. The question of a‘hearing ere svevkacteus

“spoumext li—Statutory provisions which require

public employees and public contractors to waive

their privilege against self incrimination ‘and to

answer questions relevant to their fitness or qual-

ifications, on pain of dismissal or disqualifica-

tion, are constitutionally valid ................

— .’

A.- Public contractors, like public employees, may |

. %.

ii a, TABLE OF CONTENTS

' + PAGE

ArGuMENT III—The contention that Section 2601 of

the Public Authorities Law imposes an uncon-

stitutional condition on doing business with the

State or its agencies is without basis ........... 25

s ARGUMENT IV—Regardless of the outeome of the

Gardner (No.- 635) and Sanitation (No. 823)

cases, the distinguishing circumstances of the

case at bar dictate its affirmance ............. 30

A. As Section 2601 of the Public Authorities Law

affects contractors. generally ............... 30

B. As the circumstanees of this case, as disclosed

. by the reeord, relate to this appellant ...... 33

ee ee eG U ea Fa biass pass sees 36

Appendix to Appeilee’s Brief ............ os, 2

TaBLe oF AUTHORITIES

Adkins v. Childrens Hosgital, 261 U. S525 ........ 28

‘Application of City of New Rochelle, 35 Mise. 2d 254 15

_ Application of Sero, 108 N.Y.8. 2d 305 (not peaey

reported) ..... ISS OR a 15

Atkins v. Kansas, 191 U.S. 207 ................ 7, 28, 32

| Baltimore and Ohio: R. Co. v. Interstate Com. Com., —

8 ER rn 36

_ Barsky v. Board of Regents, 347 D. 8. 442 .......:. 17

Beilan v. Board of Education, 357 U. S. 399 ..12, a

Bowles v. Willingham, 391 U. 8. 503, 520...........19, 31

Caldwell v. Lonisiana, 282-U.S. 801 ........ re

Campbell v. City of New York, 244 N. Y. 317 ...... 32 ©

Campbell Painting Corp. v. William Reid et al., Con-

* stituting the New York City Housing Authority

48 Mise. 2d 544 (Article 78 Proceeding) ...... 4,5,6

TABLE OF CONTENTS , lil

: .- ae PAGE

‘Campbell Painting Corp.:v. William Reid et al., Con-

stituting the New York City Housing Authority .

26 A. D. 2d 912 (Injunction Action) ...... sete OD

Campbell Painting Corp. v. William Reid et al., Con-

stituting the New York City Housing Authority

20 N. Y. 2d 370 (Article 78 & Injunction Ac--

Pe oh Sp RR ee) aie. | ae ae 5, 19, 30

Crane v. New NG St Wie EE ov Govan eveseeas nes 27

Daniman v, Bd. of Ed., 348 U. S. 933 .............. 18

Essgee Co. v. United States, 262 U.S. 151 .......... 36

Frost v. Railroad Commission, 271 U. S.-583 ... .25, 26, 28

Gardner v. Broderick, 20 N. Y. 2d 227 ........ 8, 9, 16, 17,

Ele. , 20, 24, 30

Garner. v. Board of Public Works, 341 U. S. 716. .7, 12, 21,

23,32

Garrity v. New Jersey, 385 U.S. 493 .............. OL.

Griffin v. aa. BN TP i scout sxxceeeecs 21

Hale v. Henkel, 201 U. S. 43, 74,75 ....... Sa ean wae 36

_ Heim v. McCall, 239 U. S.175 .........2..20. 0.008 27

Hicklin v..Coney, 290 U. S. 169 .................. 17

Holland v. Hogan, 272 F. Supp. 855..............:. 35

Humbird v. Avery, 195 U. S..480 ...... eeewnue wets 33

In Re Grand Jury, 52 Mise. 24895 ..... ieeetee, ae

- In People v. Sawpit Gymnasium, 60 N.Y.S. 2d 953

(not officially reported) ............. al ae ie 15.

In Re Quinn, 267 App. Div. 913, aff’d 293 N. Y. 787 . .15, 16

Johnson v. Zerbst, 304 U. S. 458 .2.... Sabah ae org 33

Konigsberg v. State Bar of California, 353 U. S. 252 21

Lerner v. Casey, 357 U. S. 468 .......... 12, 18, 21, 24, 32

Malloy y. Hogan, 378 U..S. 1 ...............-.... 21

Matter of Haskell-Gilroy, Inc. v. Young, 20. Mise. 2d

i 294, aff’d 10 A. D. 2d 629, leave to app. denied

2 3 ESR oe: SEAN ee Ae 33

iv | _ ‘TABLE OF CONTENTS

May v. Anderson, 345 U. S. 528 ................-. 17

McMullen v. Hoffman, 174 U.S. 639 ......... 26, 27, 28, 29

Murphy v. Waterfront Commission,-378 U.S. 52 .... +21

Nelson v: County of Los Angeles, 362 U. S. 1 ..12,17,18, -

a | 20, 24, 32

Orloff v. Willoughby, 345 U.S. 83 ............. 12, 18, 21

People v..Ovane, 214.6. ¥. 164, 174 ... 2.062. 600.20. 27

~ Pierce v. Somerset Railway, 171 U. Dee er

Perkins v. Lukens Steel, 310 U. S. 113 .......... 21, 34

Porter v. Investment Syndicate, 286 U. S. 461 ..17, 19, 3¥

Sheppard v. Barron, 194 U. S. 553 ....:.......000. 3

| Slochower v. Board of Higher Education, 350 U. S.

Ee Fe, hte Seip er eene 12, 17, 18, 21, 22, 23, 24

Spevack v. Klein, 385 U.S. 511 ....4........... 12, 21, 24

Stevens v. Marks, 383 U. S. 234 ...... Roy ee rea 16, 21

Thorpe v. Housing Authority, 386 U. S. 670 .. ees 6

Uniformed Sanitation Men Association, Inc. v. Com-

- missioner of Sanitation, Ine., 383 F. 2d 364 ..7,8, 9,

17, 18, 20, 24, 30

United Public Workers v. Mitchell, 330 U.S. 75 .....29, 32

United States v. White, 322 U.S. 694 ..:........... 36

United States ex rel. Lainu v. Warden of Wallkill

Prison, 246 F. Supp. 72........... Pea keeeare 12

United States ex rel. Laino v. Warden, 955 F. 2d

De Wucsuue ee ovcenGn cea eerceneeneae 9, 10, 12, 21, 24

Wall v. Parrot Silver & Copper Co., 244 U.S. 407... 33

Western Union _——— Co. v. Kansas, 216

+ WM et ON eehe VU ee Aedes oe ase eeee esau cees 25, 28

Wilson v. United States, 291 ee Bheec ener 36

Wood v. Hughes, 7 oy a ee OO be dees ees ne ‘akan 15

ote!

TABLE: OF CONTENTS | v

' PAGE

New York State Constitution :. .

' Article'1, Section 6 .............. Lingweneswes 8

I i I ys ov ccccesesscs afbecovaten 2

e . x .

New York State Statutes: ;

: General Municipal Law, Section 103- D vsccccrcennes 10

New York State Code’ of Criminal Procedure, 253,

ee a awa nk beeen os 14

New York State Gola of Criminal Procedure,’ 95-2-t 15

New York State Public Housing Law: |

ee uae Grd db cuts sone ree 2,37 -

ST cine <9UGM basse sme antunankewnees 2, 38 —

OS ere eee 2, 38

DU cLiCshande be baba see heecensbo/ene 2, 11, 34, 39

RE Geko dius cedeus eres te sdua oun ners .

' New York State Public Authorities’ Law: |

Section 2601 ....... isntagearewnndexin Pore 3, passim

Ee eret our Wicatectuna 12, 14

se Leek ak ve as eats wk 5, 6, 18, 19, 30

2604 ..... ft NOE Aarne eee 2, 29, 41

Re Grand Jury Chapter 350, Laws of 1964 ......... » *

‘

| MiscELLANEOUS;:

Governor’s, Message, McKinney” S- 1959 Session Law

I ov don ka 15

Governor’s Message, McKinney’s -1964 Session Law

Oe Ee ROG veces cs hwdens ey ee eee . 15, 16

Cooley, Constitution Limitations (8 Ed.) -¥ol. 1, , Pages

DE Cote tG as L aL et aee eve e cee Sein sh dyeewes 32, 33.

Wigmore on Evidence, V..8, Sections 2275, 2275(a),

_ pp. Ts NE eo 6 854 kaos 30 been ks Poe 12

Hatch Act—5 U.S.C. 1502 ................ icaeaee 29

(1933) Buy-American Act, 41 U.S.C. 10b . hoseouneuee 28

vi es TABLE OF CONTENTS

(1935) | Davis-Bacon Act, 40 U.S.C. 276a-2 :..:...... 28

-_— Walsh-Healy Public Contracts Act, 41 U. Ss, ie

oe 1123, New York City Charter (formerly Sec-

tion 903) pedascabnerbesane 8, 9, 12, 17, 18, 22, 24, 30, 31

Statutes Involved in addition to Public Authorities Law

The text insofar as pertinent herein of Sections 2, 3,

151, 157{1) of the Public Housing Law are set forth in

the Appendix, to this Brief. Said sections are published.

in McKinney’s Consolidated Laws of New York, Anno-

tated Book 44A. There are also set forth: therein, Article

18, Section 1 of the New York State Constitution and

Chapter 645, Laws of 1964 (Public Authorities Law 2604).

A A acted =

{yr

In THE:

a Court wfthe United Stites

OCTOBER TERM, 1967

No. 673

GEORGE CAMPBELL PAINTING CORP.,

° Appellant,

against .

WILLIAM REID, FRANCIS V. MADIGAN, IRA S. ROBBINS,

Members of the New York City Housi Authority, and THE

NEW YORK CITY. HOUSING AUTHORITY,

Appellees.

GEORGE CAMPBELL PAINTING CORP., |

R fete: Poaaisier

against

WILLIAM REID, FRANCIS V. MADIGAN, IRA S. ROBBINS,

Members of the New York City Housi Authority, and THE

NEW YORK CITY HOUSING AUTHORITY,

? Appellees.

On APPEAL FROM THE CouRT OF APPEALS OF THE

STATE OF New York

BRIEF OF APPELLEE NEW YORK cIry

' HOUSING AUTHORITY —

ha Statement of Facts

Appellee New York City Housing Authority is a public

corporation created by the State of New York, and with

other such . housing authorities is declared by the New

York Public Housing Law to be ‘‘agencies and instru-

mentalities of the State’’ (McKinney’s Consolidated Laws

of New York, V. 44A, Sections 2, 3 subd. 2, and 401)

(App. 37-38),* established to carry out. the functions of

slum clearance and provision of low-rent housing for per-

- sons of low income provided for in Article 18, Section 1 of

the New York Constitution -saietaneadh s V. 2, part 2, p.

475) (App. 40)..

After public bidding and award pursuant to Section 151

of the Public Housing Law (App. 39) three written

contracts for maintenance painting of appellee’s projects

..were entered into between. appellant and appellee (A. 51,

a9) [while not printed in the Appendix or the Record in’

the court below, these contracts: were meorporated therein

by reference (A. 79, Hessel affidavit, Par.-6) ].

- The respective contracts were executed on behalf of

_appellant by Geerge Campbell, Jr. as its President (A. 79)

on October 15, 1964, October 20, 1964 and November 30,

1964, respectively (see“also, A. 110-112). In addition to

other items, George Campbell;Jr. executed, in each of such

contracts, the Statement of Non-€ollusion required to be. .

contained therein by Section 2604 of the Public Authorities - -

Law (App. 41), as then in effect by virtue of Chapter

645 of the Laws of 1964, effective September 1, 1964

(McKinney’s Session Laws of New York—1964, p. 1023).

. Each contract included provisions, set forth in the Ap-

pendix in full (A. 80-81), which in substance specified that

upon refusal ef any person, when called before a Grand

Jury to testify as to transactions or contracts had with the

State or its agencies, ineluding public authorities, to sign

a waiver of reueee: | against criminal aan or to

* Reference to the joint Appendix i is designated “A” followed by ©

- the page number. Reference to the Appendix to this Brief is desig- .

nated “App.” followed by the page number. Reference to Appel-

~~ lant’s Brief is ienignened “Ap. Br.” rn by the page number.

ies Public Authorities Law’? (Ap.

answer relevant nections concerning such transactions or

contracts: ee:

(a) such person, ond wit Den of which he is a mem-.

ber, partner, officer or director shall be ‘‘dis-

qualified’’ from thereafter bidding upon or receiv-

ing awards of contracts with appellee for five.

years thereafter; and

(b) the contract may be cancelled and terminated.

Like the Statement of Non-Collusion above referred to,

these standard provisions of the contracts were mandated

-by the Public Authorities Law, in this venues ieee

2601 (A. 81; Ap. Br. 21-22).

_ Upon learning that a Grand Jury investigation was

- being conducted by\ the District Attorney of New York

County into bid rigging, bribery, conspiracy and other

crimes in connection With contracts of appellee and other

public agencies (A. 51-52, 85, 106), and that appellant’s

officers could be expected to be subpoenaed therein and -

requested to waive immunity, its President, George Camp- _

bell, Jr., purportedly resigned that office and as a Di-

rector, and surrendered alk his stock in appellant-corpora-

tion (A. 52, 95-98).. All this was expressly in contempla-

tion of his imminent call before the Grand Jury and his

_ intent to refuse to waive immunity or to answer questions ~

(A..52). Further, it was with full knowledge and advice

by counsel of the “penalties that-would result’’ if any. of-

- fieer refused to waive immunity (A. 52). Indeed, ap-

. pellant’s brief states even more specifically that its of-

ficers ‘‘were told of the disqualification provisions of the

Having been informed by the Di trict Attorney of George

Campbell, Jr.’s refusal to sign a Waiver of immunity (A.

85, 105), appellee forwarded a letter to appellant-can-

celling and terminating the contracts, and advising that it

~ : . \

would be ‘‘disqualified’’ from further bids upon = award

. of contracts of appellee for a period of five years. This

was based expressly upon the contract provisions, and no

reference was made in the letter to the provisions of the

Public Authorities Law (A. 106-107).

Appellant’s counsel by letter (A. 19-22) vigorously pro-

tested this action, requested a hearing, and expressly based

such: protest upon the alleged misinterpretation of the con-

tract provisions by appellee. This was predicated upon the

contention That George Campbell, Jr. had assertedly..re-

signed his offices and. surrendered his stock, had thereby -

severed all official relationship with appellant before his

cal] to the Grand Jury and refusal to waive immunity, and

'. was therefore not then an ‘‘officer’’ within the meaning of

the contract provision in question (A. 21)."

Throughout all the subsequent litigations brought by

appellant this contention of misinterpretation of the con-

tract provisions was consistently maintained, and made the

entire basis for its demand for relief. (A. 10, 25, 51, 53, 69,

72, 119). No other issue tendered by appellant, constitu-

tional or otherwise, appears in the record, the constitu-

tional issue having been raised only on appeal, and solely

by briefs of counsel. Nor did the New York Supreme Court

or the Appellate Division, in their decisions, make any

reference to constitutional questions, basing their deci-

sions solely upon the issue of contract jhterpretation ten-

dered by appellant, and appellee’s. defenses of availability

of other exclusive — remedies (A. 34, 130 48 Mise. 2d

. Appellant’ s Brief, page 6 says: “Indeed, in appellee’s motion

tu this Court to dismiss the appeal (pp. 12, 19-21), they stressed

the fact that, at that time, George Campbell, Jr. was a complete

stranger to appellant.” ‘This is-out of context. What was clearly

indicated in the motion was that this was appellant’s contention,

based upon George Campbell, Jr.’s ‘“‘asserted divestiture”, and that

appellant “firmly and adamantly maintained” that he was legally and

actually a total stranger to a i corporation. The record shows .

that appellee disputed the e ctiveness of this ‘“‘asserted divestiture”

(A. 89, 91-102).

044; 26 A. D. 2d 912). The New York Court of Appeals,

however, has‘stated in its opinion upon affirming that it

held. Section 2601 of the Public Authorities Law constitu-

tional (A. 134; 20 N. Y. 2d 370, 229 N. E. 2d 602), and upon

this finding the jurisdiction of this Court is invoked.

Although appellant’s notice of claim (A. 24-27), which

was a prerequisite to. the institution of litigation against

appellee (Public Housing Law, Section 157, subd. 1; App.

(40), sought damages for wrongful cancellation of the

contracts and ‘their reinstatement, as well as removal of the

disqualification of appellant from bidding, the proceeding

and action thereafter instituted, and now the subjects of

. the appeal to this Court, were grounded solely upon the

™

disqualification (A. 13, Petition, Par. 39), and the sole -

relief sought was the enjoining or removal of such dis-

qualification (A. 13, 49, 70).

In the nature of affirmative defenses to the relief de-

' manded, appellee set forth two principal contentions: (1)

that appellant’s exclusive remedy for removal of the dis-

. qualification was the judicial proceeding provided by Sec-

. tion 2603 of the Public Authorities Law {App. Br., 23-24;

A. 86-88, 103-104), and (2) that both appellant and its

President, George Campbell, Jr., had theretofore been in-

dicted by the New York County Grand Jury on three

counts of perjury in the first degree by reason of the

falsification of the statement of non-collusion executed

by George Campbell, Jr. in each of the contracts in ques-

tion, as above noted (A. 102). A copy of such indictment

is in the record (A. 110-113),? and was urged upon the

* This indictment was handed down prior to the proceedings in

the New York Supreme Court, and is accordingly contained in the

record (A. 110-113). It is respectfully considered appropriate that

this Court be informed of what has transpired with respect thereto

since the proceedings were terminated in the New York Supreme

Court, where the record was made, as well as subsequent to the

- determination of the appeals in the New York Court of Appeals.

(Footnote continued on following page)

courts below as a — to dense equitable relief sought aul 102,

104).

oe will be noted that guaseaie the Article 78 Proceeding

and the plenary action set forth in the record appellant

had commenced a prior Article 78 Proceeding, which con-’

tained a cause of action for relief from the disqualification. .

under Section 2603 of the Public Authorities Law (errone-

ously referred to as Section 103(c) of the General Munici-_

pal Law, which is identical, but covers Municipal agencies

' other than public authorities), naming as parties thereto,

as provided in Section ‘2603, the Attorney General of New

- York and the District Attorney of New York County; and.

that this proceeding had been voluntarily discontinued by

‘appellant (A. 35-36, 77-78). It will further be noted that

the New York Court of Appeals has held such Section 2603

proceeding to be appellant’s exclusive remedy for the relief

it seeks (A. 135; 20 .N. Y. 2d 370, 376-377).

(Footnote continued from preceding page)

The finak Order and Judgment of the Supreme Court in the Article

78 Proceeding was made December 14, 1965 (A. 30), and the final

Order appealed from in the Plenary Action was made March 18,

1966 (A. 122). Thereafter, on October 17, 1966 George Campbell

and the appellant (sub nom. George Campbell & Co., lnc. —see A4

Par: 7) were further indicted by the New York County Grand Jury,

under Indictment No. 3954-66, for Conspiracy to Prevent Competi-

tive Bidding on Public Contracts. Had this occurred during. or

prior to the proceedings in the: New York Supreme Court it cer- -

tainly would further have been made part of the record, as was

the indictment for Perjury above referred to. *.

~ After the decision by the New York Court of Appeals on July

7, 1967 -(A. 39, 42, 131, 134; 20 N. Y. 2d 370), and while the

appeal to this Court was pending, George Campbell, Jr. and ap-

pellant pleaded guilty during trial of the Conspiracy case to cover

both the Conspiracy and the Perjury indictments. . Copies of the

Certificates of the County Clerk and Clerk of the Supreme Court,

-.New York County, to that effect, are set forth in the Appendix to

this Brief (App. 42-43).

The foregoing is respectfully submitted for such relevance as

this-Court may deem: appropriate to attribute thereto (Cf. — Z |

v. a? Authority, 386 U. S. 670, 671-672). .

. =

Appellant has stated that the work performed for,ap-

pelee by ‘it and its predecessor constituted less than fifteen

wae of its total annual volume (A. 10).

Summary of Argument

Appellee contends that:

1. Should Section 1123 of the New York City-Charter,

in issue in the Gardmer (No. 635) and Sanitation (No.

‘823) cases, be held constitutional, then similarly Section .

* 2601 of the Public Authorities Law, in issue in this case,

should be so.held. In the light of the particular circum-

stances of this case, however, the converse is not true, and

- the determination of the New York Court of Appeals ap-

: pealed from herein should nevertheless be affirmed regard-

less of the outcome of the Gardner and Sanitation cases.

2. Statutes like Section 1123, requiring public employees

- to waive immunity and to answer questions relevant to

their qualifications for employment, on pain of dismissal,

have been ‘held constitutional by this Court, and should

continue so to be held. Section 2601 of the Public Author-

ities Law is directed to a similar purpose in the public

_ interest, to wit; the ascertainment of the qualifications of

public contractors, and seit should be held to no less an

obligation. | 7

3. The requirement that appellant’s officers waive im-

munity and answer relevant questions before a Grand Jury

on pain of disqualification from future, bidding, as.man-

dated by Section 2601, was a valid condition to.the con-

- tracts.

“>

8°

ARGUMENT I |

A public contractor should be held to re-.

quirements and standards of/ candor and

disclosure of information bearing upon his_ -

qualifications and responsibility at. least as

_ extensive as those which may constitutionally

be imposed upon public employees. Accord-

‘ingly, if waiver of the Fifth Amendment

- privilege under threat of dismissal may con-

stitutionally be required of public employees,

- ipso facto the requirement of such waiver by

a public contractor under threat of disquali-

fication from bidding should be held consti-

-tutionally. permissible. :

, The New York Court of “Appeals cited, as authority

for its determination upholding the constitutionality of

Section 2601 of the Public Authorities Law in this case, —

its decision in Matter of Gardwer v. Broderick, 20 N. Y.

2d -227, handed down. at the same time (20 N. Y. 2d 370,

376). In the Gardner case it upheld the constitutionality

of the requirement of Section 1123 of the New York City

_ Charter and Article I, Section 6 of the New York Con-

stitution ‘that upon pain of dismissal, every public em-

ployee must waive his Fifth Amendment privilege and ‘

answer questions: when called to. testify before a Grand

Jury concerning his conduct in office. Gardner, a New

York City policeman, had been dismissed pursuant to

Section 1123 for his refusal to do so.

The constitutionality of Section 1123 of the Charter was

also i in issue in the éase of Uniformed Sanitation Men As-

“sociation, Inc. v. Commissioner of Sanitation, Inc., decided

by the U. S. Court of Appeals, U.S.C.A., .2d Circuit, 383

F. 2d 364 (1967) (hereinafter the ‘‘Sanitation’’: case).

The dismissal of New York, City sanitation men, pur-

‘suant to Section 1123, for refusal to waive immunity and

to answer questions either before the City Commissioner

of Investigation or the Grand Jury was therein also sus-

tained as constitutional.

The constitutional issues on this point in the iisnteer

‘and Sanitation cases are accordingly basically identical.

The appeals therein to this Court (Gardner, No. 635;

Sanitation, No. 823) are to be argued together with the

instant appeal. Under the circumstances it appears quite

clearly that a determination in those cases upholding the

constitutionality of Section 1123. will have a major, if not

conclusive, impact upon the. constitutional issue raised in

the case at bar. But, while appellee contends that if the

constitutionality of Section 1123 of the Charter is upheld

ipso facto that of Section 2601 of the Public Authorities

Law should likewise be upheld, it will be shown in Argu-

ment IV below that the converse is not necessarily true,

and that in any event, in the particular circumstances of

this case the judgment of the New York Court of Appeals

should nevertheless be affirmed.

A. Public contractors, like. public employees, may con-

stitutionally be required to waive immunity and to

furnish information relevant to their qualifications.

Appellee respectfully submits that if the requirement

of waiver of the Fifth Amendment privilege by public

| employees on pain of dismissal, pursuant to Section 1123

of the New York City Charter, is held to be constitutionally

permissible in the Gardner and Sanitation cases, then

a fortiori, or at least equally, the requirement of Section

2601 of the Public Authorities Law, and the contract pro-

visions mandated thereby, that public contractors like

appellant similarly waive such privilege on pain of dis-

qualification from bidding, should also be held valid.

That in this respect a public contractor ought at the

least to be equated with public employees has perhaps best

been stated in United Sta ates ex rel. Laino v. Warden, 246

J 10 z . oo

F., Supp. 72 (S.D.N.Y. 1965), aff’d. 355 F. 2d 208 (2d Cir.

1965), as follows: ‘‘We affirm on Judge Tenney’s opinion

below, reported at 246 F. Supp. 72 (1965)’’. Judge°Ten-

ney, in an exhaustive opinion upholding the constitutional-

ity of Section 103-b of the General Municipal Law (246

F. Supp. 72, 98), which is a counterpart of Section 2601 of |

the Public Authorities Law (246 F. Supp. 72, 92), said:

[p. 94] :. ‘*The requirement in Section 103-b, that pub-

lie contractors waive immunity before investigative

bodies on the sanction of possible disqualification, has

the same valid basis as those snvolving public em-

ployees.

‘* Accordingly,.it-can be argued that the sanction of

possible disqualification present in Section 103-b is

predicated. on the lack of candor and frankness which

is expected of one doing business with the state, and

that such lack of cooperation and failure to discharge

one’s responsibility is incompatible with the position

held, rather than a disqualification, eo mstantio, based-

solely on one’s invocation of his Fifth Amendment

right. This rationale is, of course, the saving grace

whereby prior sanctions of this nature have withstood

judicial serutiny.”’

[p. 95]: “Moreover, in one sense relator owed a higher

' duty. to freely discuss and answer questions relating

to the performance of his official.acts than#a Govern-

ment employee: In the case of age émployee, the

state has at least a choice of hifing or not hiring an

individual, whereas in the case of a contractor the

state’s ability to choose is séverely restricted.’’

[p. 96]: *‘Similarly in the case at’ baryrelator pos-

. sessed no. inalienable right to contract with the state.

His right in that regard could be tempered by reason-

‘able conditions imposed upon him, one of them being

the necessity of being candid with the authorities and

' giving full answers to questions propounded by in-

vestigative bodies, the answers to which would reflect

on his qualifications and fitness to utilize the privilege

of doing that business. Accordingly, it is not unrea-

sonable for the state to expect that businéss‘done with

it was aboveboard and that persons doing that busi-

ness would be frank and assist in the investigation

of their qualifications. To impede that investigation

by any device is to preclude the state from judging

those qualifications and breach the trust imposed on a -

‘quasi’ governmental official such as a public contrae-

tor.’’

B. Public Authorities Law, Section 2601 is no less de-

signed to obtain information as to qualifications than

are similar statutes relating to public employees.

* Appellant appears to concede that if the inquiry at

which the waiver of the privilege is required is related to

‘¢* * * « legitimate inquiry of the person’s qualifications for

, such contract, public employment or license, the failure to

be candid justified the sanction; without offending the due

process clause’’ (Ap. Br. 10). It then goes on to assert,

however, that the waiver required by ‘‘The Public Authori-

ties Law is designed solely to punish private contractors

who exercise their privilege against self-incrimination in’

the Grand Jury room’’ (Ap. Br. 13-14), and, in effect, that

it has no relation to the purpose of eliciting information

as to the ‘qualifications’? of such contractor, as distin-

. guished from statutes imposing the penalty of dismissal

. upon public employees for like exercise of such privilege.

| Appellant could’ hardly be more clearly in error. It. is ’

the province of the District Attorney to provide for punish-

ment. Appellee, as a state agency charged with protécting

the. public interest and public funds is, on the other -hand,

interested only in the responsibility and ‘‘qualifications’’ of

those with whom it contracts. Indeed, it is to be noted that.

appellee has the right.and duty, under Section 151 of the

Public Housing Law, to ‘‘* * * make rules and regulations

Pe)

governing the austin of bidders °° 999 or even to

” prequalify’’ them. Why, therefore, is a statute such as

2601 or 2602 of the Public Authorities Law to be considered

any the less designed to elicit legitimate information as to

the qualifications of such contractors than is Section 1123

of the Charter, or similar governmental requirement#

where, on this basic ground, this Court has consistently

upheld the constitutionality of the dismissal or disqualifica-

tion of public employees? U.S. ex rel. Laino v. Warden,

supra; Beilan vy. Board \of Public Works, 357 U. S. 399

(1958); Lerner v. Casey, 357 U. S. 468 (1958); Nel .

son v. Los Angeles, 362 U.\S. 1 (1960) ; Garner v. Board of

Public Works, 341 U. S. 716 oe Orloff v. Willoughby,

345 U. S. 83 (1952).

See, also,

Wigmore, Treatise, Law of Dvblehine: V. 8, Sec-

tions 2275 and 2275(a), pp. 435-437, 3rd Ed., and

footnote in United States v. Warden of: Wallkill

Prison, 246 F. Supp. 72, 94. ‘

Furthermore, while statutes like Section 1123 of the.

_. Charter require answers to be given by public employees

- in the broad field ‘‘* * * regarding the property, govern-

ment or affairs of the city *-* *’’, Sections 2601 and 2602

of the Public Authorities Law require answers considerably |

more limited and @osely related to the ‘‘qualifications’’ of a

public contractor per se, in that they are designed to elicit

- information restricted to ‘‘* * * any transaction or con-

tract had with the State’’, its political subdivisions .and

agencies, including public authorities like appellee (cf.

Slochower v. Bodrd of Higher Education, 350 U. S. 551,

558; and see Spevack v. Klein, 385 U. S. 511, concurring

opinion of Mr. Justice Fortas, 358 U.S. at 519).

Finally, the history and° purpose of Sections 2601 and

2602 demonstrate that they were expressly adopted with

the intent, not to effect punishment, but to obtain informa-

tion which would enable the State and its agencies to weed

out and ‘‘disqualify”’ irresponsible and corrupt contrac-

tors. In approving Chapter 605, Laws of 1959, adding

these sections to the Public Authorities Law, the Governor

_ of New York said (McKinney’s 1959 Session Laws of New

York, pages 1757-1758) :

“This bill provides that a person who refuses to tes-

tify before a grand jury with respect to a contract or

transaction had with the State or one of its subdivi-

sions will be barred from entering into public con-

_ tracts for five years and may lose his rights under the

: terms of all future public contracts which may be

‘pending. 'The word person is defined to include, under

certain circumstances, a partnership and a corpora-

tion. :

“Tha recent grand jury investigation, a numbér of

persons who had transacted business with a govern-

mental agency refused to answer questions about those

transactions put to them by the grand jury. In its re-

port, the grand jury recommended consideration of

amendments to the law which would disqualify such

persons from further tramsactions with public agen-:

aan :

whom he wishes, a public agency usually lets contracts

by public auction and is required to accept the lowest

bid. For that reason, it would seem appropriate to

disqualify the bids of persons: who are unwilling to

disclose to a grand jury facts relating to some prior

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

pfopriate that public contracts should provide that the

benefits 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 4

public contract’’ (Emphasis supplied).

— a ae

Cc Asaeltiatts eenetion that the Grand Jury testimony

of -its officer, if given, ‘would not be available to

evaluate its qualifications is without basis.

But, asserts’ appellant. (Ap. Br. 13-14), the waiver re-

quired of its offieer was solely before-a Grand Jury, its

‘+ proceedings are secret, and it is not authorized to inquire ©

‘into or render reports on the fitness of non-public eni-

_ ployees. Therefore, it is implied, no information relating

to appellant’s qualifications could have been, disclosed

even if answers had been given; from which it follows that:

its disqualification was an unconstitutional punishment

based solely upon the exercise of the privilege against

self-incrimination. For these propositions there are cited

Sections 253, 253-a and 258 of the.New York Code. of

- Criminal Procedure (Ap. Br. App. 25-28), and a number

_ of New York cases (Ap. Br. 13).

_ Again appellant is very much in error. First, it may be

seen from the Governor’s message on approval of Sections

2601 and 2602 of the Public Authorities Law, that the very

- birth of those statutes stemmed from a Grand Jury report

on fraud and corruption in public contracts, and their clear

intent and purpose was to utilize information brought qdut .

. before Grand Juries ‘‘—to disqualify the bids of cok .

who are unwilling to disclose to a grand jury facts —

to some prior contract with the public.”’

_. Second, Section 253-a expressly provides, in its subdivi-

sion 1(¢), that a Grand Jury may submit a report ‘“pro-

posing . recommendations for legislative, executive or

- administrative action in the public interest based upon

stated findings.’’ And by subdivision 2 such report may be

- made a ‘‘public record”’ upon order of the Court to which

it is submitted. :

. Third, Section 258 imposes secrecy only npon ccieibins

‘of the Grand Jury as to what they said, or in what man-

ner they voted upon matters before them. It has been set-

tled that under New York law the Court may in a proper

case order the disclosure of Grand Jury minutes, including |

_their use in disciplinary proceedings against public offi-

cials, in the public interest and in the exercise of its judi- -

cia] discretion. Application of City of New Rochelle, 35

Mise. 2d 254; Application of Sero, 108 N.Y.S. 2d 305; In re

Peo. v. Sawpit Gymnasium, 60 N.Y.S. 2d 593 (not officially

reported) ; In re Quinn, 267 App. Div. 913, aff’d 293 N. Y.

187; New York Code of Criminal Procedure, Section

95(2-t).

Fourth, the New York cases cited by appellant (Ap.

Br. 13) are completely i inapropos. The sole appellate case

cited is Wood v. Hughes, 9 N. Y. 2d 144 decided in 1961.

There the New York Court of Appeals held, by a sharply

divided Court, that the century old practice of making

Grand Jury ‘‘presentments’’ was not authorized by any

New York statute, and that absent such statutory author-

ity such presentments could not be made. For the express

purpose of overruling this decision Section 253-a of the

Code of Criminal Procedure was enacted by the New York

Legislature by Chapter 350 of the Laws of 1964, effective

July 1, 1964. (McKinney’s: Session Laws of New. York,

1964). This was in compliance with the Governor’s mes-

sage to the Legislature of that year ee in part, as

follows:

‘‘Restoration of the Grand Jury ‘Power to Make Pre-

sentments.

In 1961, the Court. of Appeals ruled that the grand

jury did not have statutory power to make public re-

ports calling attention to unsavory conditions and

recommending reforms, although the practice had been

followed for more than a century and a half. In the

past these presentments have served to arouse the

public to fight organized crime, overhaul the parole .

system, rectify corrupt conditions and halt fraudulent

practices.

It is essential to confirm the grand jury’s power to

make proper presentments directed to fraud, corrup-

tion and misconduct by public officials. 1 recommend

legislation designed to réstore this power, with ap-

propriate safeguards against abuse, so that the public ;

can continue to be informed of facts bearing im-

. portantly on its welfare.’’

(McKinney’ s New York Session Laws, 1964, p.

1984).

The sole case cited by appellant ‘whieh followed the —

enactment of Section 253-a of the Code of ‘Criminal Pro-

cedure, to wit, In re Grand Jury, January, 1967, 52 Misc. 2d

895, decided by the New York Supreme Court in 1967 (Ap.

Br. 13) expressly found that where, in the course of an

authorized criminal inquiry, facts are developed which

‘require ‘‘. . . executive or administrative action in the

public interest . . .’’, under Section 253-a: ‘‘. . . the

Grand Jury may make recommendations based on stated

facts found in the evidence before it for aetion by the bodies

or officers mentioned” (52.Misc. 2d at 896).

And finally, it will be noted that in the Gardner case (No.

~ 635; 20 N. Y: 2d 227) the police officer involved had, like

- appellant’s officer in the instant case, refused to waive im-

munity before a Grand Jury. The New York Court of

Appeals sustained his dismissal because the answers he

was required to give under a waiver of immunity ‘‘

patently bore upon his fitness to remain in office, informa-.

tion which the public had a right to know and the peti-

-tioner was under a duty-.to reveal’’ (20 N. Y. 2d at 230).

Obviously, this could only mean that such information is

not, under New York law, required to be kept secret in such

circumstances although produced before a Grand Jury, and

may be made public (cf. Stevens v. Marks, 383 U. S. 234

(1966)). And see, In re Quinn, 293 N.Y. 787, supra. Such

interpretation of New York law by the highest Court of 3

- the State has consistently been held binding upon this

Court. »

Beilas ¥. Board of Ed., 357 U. 8. 399, 404;

Barsky v. Board of Regents, 347 U.S. 442, 448;

Nelson v. County of Los Angeles, 362 U.S. 1 Ss °

May v. Andersen, 345 U. S. 528, 534, 535;

Hicklin v. Coney, 290 U.S. 169, 172.

D. The question of a hearing.

Although appellant has made no point. of it as such in

its brief, the record shows that it did base its charge of

arbitrary action by appellee, at least in part, on the fact

that no hearing was granted it with respect to ‘the dis-

qualification (A. 11, 20, 22, 23). Inasmuch as that question

may arise in considering whether ‘‘due process’’ was af-

forded it in the action taken ’by appellee, it will now be

‘ discussed.. The question of a proper hearing may also

arise in Gardner (No. 635) and Sanitation (No. 823).

In Slochower (350 U. 8.°551, supra), this Court _—

out:

[350 U. S. at 554]: “The Court of Appeals of New

York—has authoritatively interpreted § 903° to mean -

that ‘the assertion of the privilege against self in-

crimination is equivalent to a resignation’. Daniman

v. Board of Education, 306 N. Y. 532, 538, 119 N. E.

2d 373, 377. Dismissal under this provision is there-

fore automatic and there is no right to charges, aonme,

hearing, or opportunity to explain.’’

While the Slochower dismissal was reversed by this

Court it was not on the basis that-§ 903 was unconstitu-

tional because, as the New York Court of Appeals thus

interpreted it; it actually precluded a hearing. That Slo-

chower did not hold § 903 itself unconstitutional in this

*§903 of the New York City Charter was identical with and .

was the predecessor of § 1123, in issue in the Gardner and Sani-

tation cases.

‘or any other respect -will be hereafter discussed.‘ In fact,

this Court pointed out in Slochower that it had dismissed -

the appeal. of thirteen other individuals summarily dis- _

missed under § 903 along with Slochower for pleading their

privilege against self-incrimination ‘‘for want of a prop-

erly presented federal question’’, in Daniman v. Board of a

Education, 348 U. S. 933 (350 U. S. at 555, Note 2).

In Lerner vy. Casey, 357 U. S. 468. (1958), this Court

said:

{357 U. S. at 473]: “‘Iti is -— that New York’s. stat-

ute deprives him of procedural due process, in that

it provides for dismissal of employees in the first

_. instance without a statutory right to .a hearing, op-

' portunity for cross éxamination, or disclosure of the

% evidence on which dismissal is based. However, ap-

pellant is in no position to complain of* procedural

defects in the statute. His own refusal -to answer .

blocked proceedings at his appearances before the De-

partment of Investigation, and more important he

failed to pursue his administrative remedy by ap- -

pealing to and obtaining a hearing before the Civil

~ Service.Commission.”’

-* See also, Nelson v. County of Los Angeles, 362 U. Ss. 1

(1960) ; Orloff v. Willoughby, 345 U.S. 83. ° — .:

The failure of appellant in the case at bar to pursue

the adequate and exclusive judicial remedy afforded by .

Section 2603 of the Public Authorities Law- should. be no

less fatal to its appeal here than was that: of Lerner. to

-pursue his administrative remedy. As interpreted by the

New York Court of Appeals such judicial proceeding would

have given appellant full opportunity to air its contention

that its ‘erstwhile president had legitimately resigned and

‘severed all connection with it, and that by reason thereof.

4 Petitioner’s Brief (pp. 9-12) in the Sanitation. case contends

that it dig. And see Ap. Br. 9-10 in the case at bar.

aay

no “vicarious penalty’’ should -have been visited upon it

for his refusal to waive his privilege against self-incrimi-

nation (see Ap. Br. 15-17).* For, said the Court of Appeals:

[20 N. Y. 2d 370, at 376-377]: ‘There may be

times when the statute will operate to penalize a cor-

poration which had severed its connection with the

recalcitrant officer and which has-otherwise been coop-

“* erative. The Legislature has, however, recognized this

problem and has specified a procedure by which dis-.

qualification can be removed under such circumstances.

_(Publie Authorities Law, § 2603.) The appellant’s ex-

clusive remedy is the procedure outlined in that

statute.’’ :

That such Siemens of the statute by: ‘thé highest

Court of New York is “rege = this Court has already |

- peen seen (supra, p. 16).

Actually, the rationale to be distilled from this Court’s

rulings sustaining the dismissal or disqualification of pub-

- lie employees—with whom, it is respectfully submitted,

public contractors should at‘ least be equated—for refusal

_to waive their privilege against self incrimination or to an--

swer relevant questions, has little to do with hearings or

_ their requirement.. Where hearings have been held they

have merely been pro forma and of little or no defensive

value to the person involved, since their net effect ‘has

been merely to record the undisputed fact that such person

had, indeed, refused to waive or answer questions.

- § Actually § 2603 affords not only the remedy of a judicial hear- |

ing, but one which would preclude any harm at all to.the contractor

if he could convince the Court of a justifiable basis for restraining

the imposition of the penalty. For subdivision 2 of. § 2603 states

that upon the filing of his petition the Court may~-stay the can- .

cellation or termination of any contracts pending a decision thereon

(Ap. Br. 24). See Bowles v. Willingham, 321 U. S. 503, 520, and

Porter v. Investors Syndicate, 286 U. S. 461, 470-471, where such

Provisions were held to constitute due proeess..

This was certainly the case in Gardner (No. 635) and

Sanitation (No. 823).:In Beilan v. Bd. of Education, 357

U. S. 399, the statute equated such refusal with ‘‘incom-

petency’’, a statutory ground for dismissa], and all that

was brought out at the hearing -was the undisputed fact

that such refusal -had, indeed, occurred. Said this Court

in sustaining the dismissal:

[357 U. S. 399, at 404]: ‘‘The only question before

us is whether the Federal Constitution prohibits peti-

tioner’s discharge for statutory ‘incompetency’ based

on his refusal to answer the Superintendent’s ques-

‘tions.”’

In Shinn v. Bd. " Public Works, 3A1 U. S. 716, the ©

mere refusal to take an oath and execute an affidavit relat-

ing to subversive activities or affiliations was held sufficient

and valid ground for statutory dismissal, after a hearing

which simply brought out that. undisputed fact.

In Nelson v. County of Los ‘Angeles, 362 U.S. 1a per-

manent public employee was given a hearing which sim-

ply confirmed his undisputed refusal to waive his. privilege.

and answer questions. The hearing resulted in a finding of

‘‘insubordination’”’ solely by reason: thereof, which, under

the statute, was cause for discharge. A temporary em-

_ ployee. was summarily discharged for the same reason and

on the same basis and refused a hearing, none being pro-

vided by statute for a temporary employee. This Court

held both ces constitutionally valid.

ARGUMENT II

Statutory provisions which require public

employees and public contractors to waive

their privilege against self incrimination and

- to answer questions relevant to their fitness

_or qualifications, on pain of dismissal or dis-

- . qualification, are constitutionally valid.

The Gardner (No. 635) and Sanitation (No. 823) cases,

and with them, presumably, the case at bar, are patent

. sequels to Garrity v..New Jersey, 385 U. S. 493 (1967),

and Spevack v. Klein, 385 U. S. 511 (1967), and will un-

doubtedly supply the answer to the Court’s present views

on the constitutional question in those cases expressly not

reached (385 U. S. at 516, Note 3; and see concurring |

- opinion of Mr. Justice Fortas in Spevack, 385 U. S. at 519-

520). That is the question whether a public employee (in

arrity, a policeman) may be dismissed who invokes the

privilege against self incrimination when asked questions

relating to his conduct in office, especially when, as Justice

Fortas stated, they are

sece

oe |

questions specifically, directly and narrowly

relating to’ the performance of his: official duties.* * *.’’

(385 U. S. at 519) :

Here, in a nutshell, i is the rationale which underlies cases

like Beilon, Garner, Nelson, Lerner, Orloff v. Willoughby,

_ 345 U. S. 83, and Laino, and by which they may be-har- ©

monized with. cases like Slochower, Garrity, Spevack,

Konigsberg v. State Bar of California, 353 U.S. 252 (1952),

Malloy v. Hogan, 378 U. S. 1 (1964), Griffin v. California,

380 U. S. 609, and Stevens v.. Marks, 383 U. S. 234 (1966).

A persen not related to governmental functions may not

be made to suffer a penalty for refusing to waive his Fifth

<3 Amendment privilege or to have that made ‘‘costly”’ (e.g.,-

os Griffin, Malloy, -Spevack), and no one, private or public,

may be compelled to testify against his will and thereby be _

snhiected to ‘actd&l or threatened crimjnal prosecution

(Stevens, Garrity, Malloy, Murphy v. Waterfront Commis-

sion, 378 U. S. 52 (1964)). But the overriding public -in-

terest of the State in preserving tHe integrity, responsi- |

bility and qualifications of its public servants (Bedan, -

Garner, Nelson, Lerner, Orloff), and in eliminating those

not qualified by reason of fraud and corruption from con-

tracting with it (Ldino), tips the scale of accommodation

between ‘private rights and the public interest in favor of

“@

the constitutionality of statutes: like Section 1123 of the .

New York City Charter and 2601 of the Public Authorities

Law; provided that they operate only to the extent of dis-

qualifying’ or dismissing such public employees or public

contractors while preserving to them their unquestioned

constitutional right to remain silent, if they so choose.

Slochower was certainly not to the contrary, and did not

invalidate then Section 903 (now Section 1123) of the New

York City Charter itself, as is now contended. All that

was held was that the application of the statute in the par-.

ticular circumstances of that case unconstitutionally *in-

vaded Slochower’s rights. Said the Court in Slochower:

(350 U. S. at 555): “We do not decide whether a

- elaim under the ‘privilege or immunities’ clause was

considered below, since we conclude the summary dis-

mfissal of appellant in the circumstances of this case

violates due process of law.” | ;

_+ The circumstances. referred’ to by the Court were these:

It found, first, that Slochower’s dismissal had been predi-

eated upon an inference of guilt derived from the very fact

of. the invocation of his Fifth Amendment privilege. This

‘the Court vigorously condemned, saying:

(350 U. S. at 557): oo oe _must condemn the

practice of imputing a-sinister meaning to the exercise

of a person’s constitutional right under the Fifth

Amendment. . . In Ullman v. United States, 350 U.S.

» 422, 100 L. ed. 511, 76 S.Ct, 497 . . -.we scored the

assumption that those who claim this privilege are

either criminals or perjurers.”’ ,

Second, the Court found that ‘the inquiry at which

Slochower invoked .the privilege was before a Congres-

sional Committee, not’a City or State agency, and expressly

had no/relation either to his qualifications or the ‘‘* .” °

-__. property, affairs or government of the city, or * * * official

a t bg

F . —

ieee 3

93 .

conduct of city employees”, to which Section 903 limited -

_ the waiver requirement (350 U. S. at 558).

Third, the Court found that Slochower had long before

given the State authorities full information on the sub-

ject of his Communist affiliations, which were the object

of the inquiry, that he had been continued for many years —

in his position with such full knowledge, and that his*quali-

fications for his position were otherwise i1 in no way attacked.

The Court quite clearly indicated, on the other hand,

that had the inquiry been properly directed to an ascer- .

tainment of his qualifications for continued employment,

Slochower, while having the absolute right to refuse to

tionally have been dismissed therefor. On this basis the

* Court distinguished Slochower from Garner v. Board of

Public Works, 341 U. S. 716 (1950), as follows:

(350 U. S. at 558): ‘‘In this respect the presen: case

differs materially from Garner, where the city- was

attempting to elicit information necessary to dagermine

the qualifications of its employees. Here, the Board

had possessed the pertinent information for 12 years,

and the questions which Professor Slochower refused °.

to answer were admittedly asked for a purpose wholly

unrelated to his college functions. On such a record

the Board cannot claim that its action was part of a

_ bona fide attempt to gain needed and relevant in-

formation.’ ” ‘s

And finally, said this ‘Gnet:

(350 U. S. at-559): ‘‘This is not to say that Slochower

has a constitutional right to be an associate professor

of German at Brooklyn College. The State has broad

powers in the selection and discharge of its fs Paty

and it may be that proper inquiry would show Sloch- ‘

ower’s continued employment to be inconsistent with

a real interest of the State. But there has been no

- such i inquiry here.”?

24,

r) il 7

That Slochower accordingly cannot be construed as hav-

ing invalidated statutes like ,Section 1123 of the Charter, .

invelved in the Gardner and Sanitation cases now before

the Court, or Section 2601 of the Public Autiorities Law,

involved in the case at bar, is further confirmed. by the’

Court’s decisions subsequent: to Slochower, . which was

decided in 1955. Beilan (1958), Lerner (1958), and Nelson be

| (1960) each distinguished Slochower on one or more of the

~ grounds above neted, and each held valid the dismissal of a

'. publie semployee who invoked his Fifth Amendment

privilege and refused to answer relevant questions related

to his fitness and. qualifications for public employment. —

It thus becomes clear, as stated above, that whether they

sustained or reversed the dismissals involved, the rationale

‘underlying the decisions of this Court to date on the con-

stitutional principle here in question may be summarized

thus: A public employee, like all others, has an absolute

constitutional right to ‘invoke _ his Fifth Amendment

privilege against self incrimination in any governmental

inquiry. He does not, however, have a right to do so and

to refuse to answer questions ‘*. . . specifically, directly

and narrowly relgting to the performance of his official

duties . . .’’ (Mr. Justice Fortas in Spevack, 385 U.,S. at

519, supra) and still retain his public employment. bay

‘That a public contractor like this appellant should be

subject to no less a burden’ with respect to questions specifi-

cally, directly and narrowly relating to the performance of

its publié contracts (Public Authorities Law, Séction 2601)

- 4m order to deterinine its qualifications for additional such

employment would seem inescapably to follow in all reason,

" logie and equity, as has been so cogently stated by Tenney,

D. J. in Laino, supra.

ee °

2 .

25 .

ARGUMENT Hl | amt i

The contention that Section 2601 of the Pub-

lic Authorities Law imposes an unconstitu-

tional condition on doing business with the .

State or its agencies is without basis.

Appellant asserts that the ‘‘condition’’ provided for in

the contracts involved, pursuant to the mandate of Section —

2601 of the Public Authorities Law, to wit, that its officers

must waive immunity and answer relevant questions before

a Grand Jury in order to avoid its disqualification from

bidding, is an unconstitutional condition to the granting

of a governmental benefit or privilege. For this proposi-

tion it cites cases like Frost v. Railroad Commission, 271°

U. 8..583; Western Union Telegraph Co. v. Kamsas, 216

U. S. 1, and others of similar import @Ap. Br. 18-19).

In none of these cases was there involved a contract be-

tween the State or one of its agencies for the performance

of public work, as does the case at bar, or for the furnish-

ing of materials or similar direct contracts with the State

or its agencies. On the contrary, what they involved was

strictly such a limitation, condition or imposition on the ~

right to conduct private business pr. to earn a livelihood

within the State® as to constitute, variously, a denial of

equal protection of the laws, of freedom of contract, of tak-

ing of private property without due process, of violation of .

the commerce clause of the Constitution, or other constitu-

tional infringement. aoe ar

‘The Frost case is typical of this. There the State

prohibited the use of the public highways entifely to the

plaintiff, a private carrier, unless it became a public carrier

* It will be noted that appellant asserts that less than fifteen per

cent of its annual volume of work was pertoraned for appellee

(A10).

ee . ae

subject to all of the regulations, limitations and controls

imposed upon a public carrier. |

Said the Court:

_ (271 U. S. at 592) : “Thus, it will be seen that, under

the act as construed by the state-court, whose construc-

tion is binding upon us, a private, carrier may avail

himself of the use of the highways only upon condition .

transportation and subject himself to all the duties

+’ and burdens imposed by the act won common carriers _

' ‘The requirement does not apply to a private car-

rier qua private. carrier, but to him only in his imposed

statutory character of common earrier.”’ ' “al i

“The Court accordingly went on to say that, even assuming»

- that the State would have the right to deny the use of he

highways to the plaintiff entirely (without so décii =

such a condition to its use was in violation of the con-

. fective process of requiring a surrender, which, though in

form voluntary, in fact lacks none ‘of the elements of com- .

pulsion’’ (271 U. S. at 593). | )

| The rulings of this Court with respect to conditions and

‘ limitations which may properly be included in contracts

. between the government, State or Federal, or their agencies,

_ with private contractors for the performance of public

work or the furnishing of materials or seryices, are on an

entirely different basis. — ; or hss

Thus,-in McMullen v. Ho ffman,-174 U.S. 639 (1898), this

Court said: rae fee

(At 651): ‘‘Upon general principles it must be ap-

- parent that biddings for contracts for public works can-

not be surrounded with too many precautions for the

,purpose of obtaining perfectly fair and bona ‘fide bids..

\ gueh precautions are absolutely necessary in order to

i prevent the successful pe rpetration of fraud in the

way of combinations among those who are ostensible

rivals but who in truth are secretly banded together

for the purpose of obtaining contracts from public’

bodies such as municipal and other corporations at a —

higher figure than they otherwise would.”’

In Atkin v. Konons, 191 ~ S. 207 (1998), he Court

+ * gpd

(at 222- 293) : “eT cannot be domned’ a _ of the

liberty of any contractor that ke be allowed to do

-* public work in any mode he may choose to adopt, with- (

out regard to the wishes of the state. On the con-

trary, it belongs to the state, as the guardian and .

_ trustee for its people, and having control of its affairs,

to prescribe the conditions upon which it will permit .

public work to be done on its behalf, or on behalf of

its municipalities. ’?- (Emphasis the Court’s).

(at 224): ‘We rest our decision’ on the broad ground

that the work being of a publié character, absolutely -

under the control of the-state and its municipal agents

acting by its authority, it is for-the state to prescribe.-.

the conditions under which it will permit work of that

kind to be done.’ | : ¢

And in Perkins v. Lukens Steet: Company, 310 U. S. 113

-_ the Court said:

' (at 127): ‘‘Like private individuals, and businesses,

_the Government enjoys the unrestricted power to pro-

duce. its own’ supplies, to determine those with whom

- it will deal, and to fix the terms and conditions upon

which it will make oars purchases. =

To similar effect are:

Hewm v. McCall, 239 U. 8. 175, 191 (1915) ;

People v. Crane, 214 N. Y. 154, aff& Crane v. ~

_ *New York, 239 U. S. 195 (1915).

The distinction between cases like Frost, Western Union

Telegraph and others cited by appellant and those like

Atkin and thé others cited above has been succinctly set

forth in Adkins v. Children’s Hospital, 261 U. S. 525 (1922),

where the Court upheld the constitutionality of conditions .

in public work contracts: ‘‘. . . as depending, not upon

the right to. condition private contracts, but upon the right

of the government to prescribe the conditions upon which

it will permit work of a public character to be done for it,

or in the case of a state, for its municipalities’? (261 U. S.

at 547). :

That the ‘‘condition’’ imposed we Section 2601 of the

Public Authorities Law, and the provisions of the con-

tracts in. question mandated by it, is one of the State’s

legitimate ‘‘precautions for the purpose ef obtaining per-

- feetly fair and bona fide bids’? (McMullén v. Hoffman,

supra), can hardly, it is respectfully submitted, be reason-

ably disputed. This is especially so in-the light of its

intent and purpose, as has been seen (see Argument I,

supra) to elicit appropriate information as to the ‘‘quali-

fications’? and responsibility of prospective contractors for

future bidding on public contracts, and to weed out and

_ disqualify fraudulent and corrupt ones.

On this subject it-may be noted that there are numerous

statutory conditiqps required to be inserted in public con-

tracts, State and Federal, the violation of which result in

severe penalties, including ‘‘black-listing’’, which would . |

appear to be even more onerous than that in issue here,

and which have withstood the test of judicial scrutiny:

Among these are those required) by :

‘The ‘Buy American”’ 41 U.S.C., 10b (1933)—

Black-listing for faildfe to cofaply with requirements

to use. American made. materials.

The Davis-Bacon Act, 40 U.S.C., 276a-2 (1935) —Black-

listing for failure to pay prevailing wages.

, i

adie, “4

The Walsh Healy. Publie Contracts Act, 41.U.S.C., 37

" (1936) —Black- listing for — wage, hours ied <

_ safety yree isions.

Workers v. Mitchell, 330 U. 8S: 75 (1946), where the Hatch’

Act, now 5 U.S.C, Section 1502, prohibiting Federal civil

- service employees from engaging in: political activties, was

held to be constitutional. Cf.: Caldwell ve. . Louisiana, 282

U. S. 801, (1930).

It is a peculiar and obviously inconsistent circumstance’.

‘in this’ case that appellant has raised no .constitutional

issue with respect to the requirement of Section 2604 of

the Public Authorities Law that its officer execute, in each

of the contracts, a Statement of: Non-Collusion (see State-

ment of Facts, supra, p. 2) under penalty of perjury.

Thai was as much a ‘‘conditton’’ requiring him to incrimi-

nate himself in order for appellant’ to obtain the privilege.

or benefit of the contract as was the requirement for an-

swering questions-concerning prior public contracts- before

the Grand Jury. Yet he voluntarily executed it, was in-_

dicted, along with- -appellant, for perjury for falsifying it

(A. 110-112), and’ both ‘subsequently pleaded guilty: ‘to a

second indictment for Conspiracy to Prevent Competitive

Bidding on Public Contracts, to cover both indictments. |

_ (See Statement, of Facts, ae, PP. - 6, Note 2, and i.

-42-43).

This is also a conclusive ‘caieiiak of the concrete

and eminently reasonable basis, in the public interest, for

requiring both the waiver SPimmunity which is here under’

challenge, as well as such non-collusive statement. (See

McMullen v. Hoffman, 174 U. S. 639, 651, swpra.)

Finally, the question might well be asked whether any

constitutional attack could possibly be made against similar

‘‘eonditions”’ were they to be included in contracts nego-

tiated with or bid upon for a-private firm. which desired

30 eahD at ae

thereby’ to reduce the possibility of fraud or collusion. Can

it‘ reasonably be said that the public interest and public

funds cannot Soke be similarly safeguarded? -

‘ARGUMENT IV

Reelin: é the outcome of the Gardner

‘(No. 635) and Sanitation (No. 823) cases,

the distinguishing circumstances of the case

at bar dictate its affirmance. ,.,

It. has been contended in this brief (Argument I; supra) |

that if the constitutionality of Section .1123 of the New.

York City Charter, attacked in the Gardner and Sanitation

cases, is upheld, then ipso facto so should be that of Section

2601 of the Public Authorities Law in issue herein, and that °

the judgment in this case should accordingly be affirmed.

Appellee by no means concedes that the converse is true,

and respectfully submits that it is not. The distinguishing

features of this case, either as a géneral matter applicable _

ta all publie contractors subject to the requirements of the

Public Authorities Law, or with-respect to this particular

appellant as disclosed by this record, or both, are such as

to dictate an affirmance herein regardless of -~ outcome in

Gardner and Sanitation.

ie Section 2601 of the Public Anitertties Law affects ‘

- contractors generally, weet

: _ Tt has been asserted that Section 2601 ; is repugnant to

the due process clause of the Fourteenth Amendment.

This Court has held, however, that where an. adequate

judicial review is afforded by’a statute affecting property °

rights, especially. where there is- provision for.a stay pend-

ing such review, due process is satisfied. Section 2603 of

the Public Authorities Law, as interpreted by the New

York Court of Appeals in this case (20 N. Y. 2d 370, at

376-377, supra), expressly provides for such review. It

- further iaaieite provides for a stay. Section 1128 of the »

New York City Charter on its face provides for neither..

" In Bowles v. Willingham, 321 U. S. 503 (1944), this Court

said: i

(at 520): ‘‘Here iaiiaes has provided ‘for judicial

review of the Administrator’s action. To be sure, that .

review comes after the order has been promulgated; '

and no provision for a stay is made. But as we have

held in. Yakus v. United States. . . (321 U. S. 414), —

- that review’ satisfies the requirements of due process.

As stated by Mr. Justice Brandeis for a unanimous

_ Court in Phillips v. Commissioner of Internal Revenue,,

283 U. S. 589, 596, 597). . .: ‘Where only property

rights are involved, nfere postponement of the judicial

inquiry is not a denial of due process, if the opportunity

( given for the ultimate. judicial determination of -the .

liability is adequate.’ ”’ ae

In Porter v. anainad Syndicate, 286 U. S. 461 (1992),

this Court’ said:

(at 470-471) : ‘“Where as ancillary to the review and

correction of administrative action, the state statute

provides that the complaining a

pending final decision, there is no deprivation of due

y have'a stay ;

process, although the statute in words attributes final |

and binding character to the initial decision of a board

or commissioner. “5

2. What is itvolved in Section 2601 situations are vol-

. untary uhdertakings by contractors in competitive bid- -

specifications, isicluding the requirement for waiver pf

immunity by its officers in Grand Jury investigatiofis.

This is but one of the contractual commitments for which

the public agency has bargained, and to which each of

a She

knowledge of and assent to each of its conditions >

its bidders has aw | They should be held to their

bargain.: - °

_As the’ New York Court of Appeals has said in Campbell

v. City of New York, 244 N. Y. 317 (citing Atkin v. ee,

: 191 U. S. 307, supra) ; ‘

_ (244 N. Y. at 327 ).: “The oF Tee it on con-

tract as the Sfate tenders it, or leave, it altogether.

He is not injured in his constitutional rights by ‘being

put to the election. * * * He may think the risk too

great. He will then decline to enter into relations

with a municipality so exacting. He may survey the

_ risk and take it... He will then be bound by the —

_ &ecording to its meaning * * *’’..

On the other hand, State statutes having the effect of

- Section 1123 of the New York City Charter have been im-

posed upon public employees after entering into their

employment, without their assent, and nevertheless held

valid. (f: Garner, Betlan, Lanes, Nélson, United Public

Workers, supra. : Moreover, i in these cases the entire liveli-

hood of the public employee was involved. .Not so with .

contractors, who may take their business elsewhere where

they will not be subject to the requirements of public

‘ vontratts here complained of, if they are not prepared

to subscribe to them.

3. What a , poblis contractor is required to subscribe to.

under Section 2601 is an agreement to waive a constitu-

tional privilege which at the niost will affect nothing more :

than a property ‘right, to wit, the contract, which is sub-

ject to cancellation, and, if that can also (be considered a

property right, his opportunity to bid on-future public

. contraets. Such a waiver has been held to be ~valid.

Cooley, in his Treatise on Constitutional Limitations (8th

Edition), Vol. 1, says, as to this, on pages 368-369 :

‘‘Where a constitutional provision is designed for

the protection solely of the property rights of ‘the

4.)

, 33

citizen, it ig competent for him to waive the protection,

and to consent to such action as’ would be invalid if

taken against his will’’, citing:

' Sheppard v: Biron, 194 U. S. 553;

Humbird v. Avery, 195 U._S. 480;

Pierce v. Somerset Railway, 171 U. S.. 641, 648.