Summary
rejecting state constitutional challenges to public retirement plan based onholding that retirement benefits are a component of present compensation
Summary of this case from Opn. No. 2007-F1Opinion
Argued May 8, 1975
Decided July 2, 1975
Appeal from the Appellate Division of the Supreme Court in the Third Judicial Department, JOHN H. PENNOCK, J.
Ralph Boryszewski, appellant pro se, and for Robert E. Kesel and another, appellants.
Louis J. Lefkowitz, Attorney-General (Grace K. Banoff and Ruth Kessler Toch of counsel), for respondents.
We hold today that a taxpayer has standing to challenge enactments of our State Legislature as contrary to the mandates of our State Constitution. Recognizing such procedural right we proceed on the present broad motion to dismiss to consider the sufficiency of the particular claims of unconstitutionality urged here by these petitioners. In so doing, we reject their contentions that the State's legislative and executive retirement plan is unconstitutional and we dismiss their assertions with respect to the unconstitutionality of budget statutes providing lump sum "lulus" in lieu of expenses for members of the Legislature for failure to state a cause of action as to which declaratory relief may be granted.
Much attention has been devoted in our court to the determination of which litigants, if any, shall be recognized as having legal capacity to test the constitutionality of a State statute authorizing the expenditure of State moneys. Over vigorous dissents, in St. Clair v Yonkers Raceway ( 13 N.Y.2d 72) by a 4-3 vote our court continued the narrow limitation of persons having such capacity to those "personally aggrieved thereby, and then only if the determination of the grievance requires a determination of constitutionality" (p 76). In reliance on holdings in older cases, we then said (p 76), "It seems to us proper 'that the courts of this state have denied the right of a citizen and taxpayer to bring before the court for review the acts of another department of government simply because he is one of many such citizens and taxpayers'."
Today we no longer think this proper, and accordingly we depart from our holding in St. Clair, for the persuasive reasons stated by the dissenters there and for reasons enunciated by dissenters in subsequent decisions. Even the majority opinions in these later decisions reflect some lack of enthusiasm for the St. Clair doctrine.
The holding and rationale in Matter of Donohue v Cornelius ( 17 N.Y.2d 390), the first post- St. Clair case, were very much tempered in Matter of Burke v Sugarman ( 35 N.Y.2d 39), in which the court recognized the capacity of interested litigants to challenge civil service procedures on constitutional grounds.
In Matter of Posner v Rockefeller ( 26 N.Y.2d 970, 972) the next case, three of the Judges of our court concurred on the standing issue only under constraint of St. Clair. The following year in Hidley v Rockefeller ( 28 N.Y.2d 439, 440) three members of the court dissented on the particular standing issue there confronted, as to which the majority position was posited only on citations to St. Clair and Posner.
By way of apparent contrast see Matter of Bell v Levitt ( 44 A.D.2d 742, mot for lv to app den 34 N.Y.2d 518).
In other settings in which questions of standing have been posed it has been our disposition to expand rather than to contract the doctrine (e.g., Matter of Douglaston Civic Assn. v Galvin, 36 N.Y.2d 1; Matter of National Organization for Women v State Div. of Human Rights, 34 N.Y.2d 416; cf. Matter of Burke v Sugarman, supra, p 45).
We are satisfied that the time has now come when the judicially formulated restriction on standing (which we recognize has had a venerable existence) should be modified to bring our State's practice with respect to review of State legislative action into conformity not only with the practice in the majority of other States but also with the procedural standing of taxpayers to challenge local actions (General Municipal Law, § 51). We are now prepared to recognize standing where, as in the present case, the failure to accord such standing would be in effect to erect an impenetrable barrier to any judicial scrutiny of legislative action. In the present instance it must be considered unlikely that the officials of State government who would otherwise be the only ones having standing to seek review would vigorously attack legislation under which each is or may be a personal beneficiary. Moreover, it may even properly be thought that the responsibility of the Attorney-General and of other State officials is to uphold and effectively to support action taken by the legislative and executive branches of government. As Judge FULD wrote generally in St. Clair (supra, p 79) "The suggestion * * * that the Attorney-General and other state officials may be relied upon to attack the constitutional validity of state legislation is both unreal in fact and dubious in theory". His estimate of the situation has been verified in the years since St. Clair.
Where the prospect of challenge to the constitutionality of State legislation is otherwise effectually remote, it would be particularly repellant today, when every encouragement to the individual citizen-taxpayer is to take an active, aggressive interest in his State as well as his local and national government, to continue to exclude him from access to the judicial process — since Marbury v Madison (1 Cranch [5 US] 137), the classical means for effective scrutiny of legislative and executive action. The role of the judiciary is integral to the doctrine of separation of powers. It is unacceptable now by any process of continued quarantine to exclude the very persons most likely to invoke its powers.
We, therefore, recognize the standing of these petitioners to raise for judicial adjudication the claims of unconstitutionality that they now urge upon us.
We turn then to the procedural aspects of this appeal, since the Appellate Division, erroneously as we now hold, disposed of the case on the standing issue.
Although the petition may be said to be imprecisely drawn and appears to have been conceived as perhaps intended to institute a proceeding under CPLR article 78, both declaratory and injunctive relief are sought. In this circumstance and to allow for the proper prosecution of the action we exercise the authority granted in CPLR 103 (subd [c]) and convert the proceeding into an action for a declaratory judgment — the appropriate vehicle for examination of the constitutionality of legislation (Matter of Jerry v Board of Educ. of City School Dist. of City of Syracuse, 35 N.Y.2d 534, 544; Matter of Gold v Lomenzo, 29 N.Y.2d 468, 476, n 4; Matter of Overhill Bldg. Co. v Delany, 28 N.Y.2d 449, 458; 3 Weinstein-Korn-Miller, N Y Civ Prac, par 3001.06g).
The action, so converted, is before us on respondents' motion to dismiss under CPLR 3211. The motion was grounded, inter alia, on lack of standing and failure to state a cause of action and included the customary prayer for "such other and further relief as to this court may seem just and proper". The material allegations of the petition must be deemed to be constructively admitted; the differences between the parties on a motion to dismiss revolve exclusively around questions of law.
In these circumstances, and once it has been determined that the case is properly one for declaratory relief, the court may properly proceed, on a motion to dismiss in an action for a declaratory judgment, to a consideration of the sufficiency of the plaintiff's claims on the merits (St. Lawrence Univ. v Trustees of Theol. School of St. Lawrence Univ., 20 N.Y.2d 317; Civil Serv. Forum v New York City Tr. Auth., 4 N.Y.2d 866, affg 4 A.D.2d 117; Plaza Mgt. Co. v City Rent Agency, 31 A.D.2d 347; Matter of Mandis v Gorski, 24 A.D.2d 181; Garcia v Motor Vehicle Acc. Ind. Corp., 18 A.D.2d 62; cf. German Masonic Temple Assn. v City of New York, 279 N.Y. 452, 457).
We concern ourselves only with the assertions advanced on the merits by the petitioners. They challenge the constitutionality of two legislative enactments — the State's legislative and executive retirement plan and budget statutes providing lump sum "lulus" in lieu of expenses for members of the Legislature.
We reject petitioners' contentions that the legislative and executive retirement plan violates provisions of our State Constitution. Petitioners first assert that the retirement plan (unidentified in petitioners' papers but presumably the plan established by L 1968, ch 219, now to be found in § 80-a of the Retirement and Social Security Law) violates section 7 of article XIII which provides: "Each of the state officers named in this constitution shall, during his continuance in office, receive a compensation, to be fixed by law, which shall not be increased or diminished during the term for which he shall have been elected or appointed; nor shall he receive to his use any fees or perquisites of office or other compensation." To the extent that this section is applicable to the participants in this retirement plan, petitioners argue that the section bars "future payments for past services" and that compensation can be paid an officer only "during his continuance in office". Petitioners go on to contend that distribution of retirement plan benefits also violates the proscription against the receipt of "fees or perquisites of office or other compensation". Finally reference is made to section 6 of article III which provides: "Each member of the legislature shall receive for his services a like annual salary, to be fixed by law. He shall also be reimbursed for his actual traveling expenses in going to and returning from the place in which the legislature meets, not more than once each week while the legislature is in session. Senators, when the senate alone is convened in extraordinary session, or when serving as members of the court for the trial of impeachments, and such members of the assembly, not exceeding nine in number, as shall be appointed managers of an impeachment, shall receive an additional per diem allowance, to be fixed by law. Any member, while serving as an officer of his house or in any other special capacity therein or directly connected therewith not hereinbefore in this section specified, may also be paid and receive, in addition, any allowance which may be fixed by law for the particular and additional services appertaining to or entailed by such office or special capacity. Neither the salary of any member nor any other allowance so fixed may be increased or diminished during, and with respect to, the term for which he shall have been elected, nor shall he be paid or receive any other extra compensation. The provisions of this section and laws enacted in compliance therewith shall govern and be exclusively controlling, according to their terms. Members shall continue to receive such salary and additional allowance as heretofore fixed and provided in this section, until changed by law pursuant to this section." The argument is implied that nothing under this section authorizes contributions to the retirement plan. By way of anticipatory replication petitioners assert that since the participants in the retirement plan are not otherwise legally or constitutionally entitled to its benefits, no support for the plan can be found in section 7 of article V which provides: "After July first, nineteen hundred forty, membership in any pension or retirement system of the state or of a civil division thereof shall be a contractual relationship, the benefits of which shall not be diminished or impaired." Petitioners invite our attention to no other pertinent constitutional provision.
We think these arguments, taken singly or in combination, fall far short of establishing constitutional invalidity.
Retirement benefits in the public as in the private sector must now be viewed as a significant and integral component of current compensation. The early concept of a pension as a gratuity paid by the government in recognition of past services (see Dismuke v United States, 297 U.S. 167) is now obsolete. Such benefits are now recognized as a type of deferred compensation (44 N.Y. Jur Pensions and Retirement Systems, § 1, p 256). As we observed in review of the New York State Teachers Retirement System, "the security offered by membership in the retirement system is generally regarded as an inducement to employment in State service or in the public schools. The value of the retirement benefits and prospective rate of payment, especially in the face of continued inflation, is of vital concern to the [members] and might well be the determining factor in their decision to continue in the teaching profession, or seek more lucrative employment." (Birnbaum v New York State Teachers Retirement System, 5 N.Y.2d 1, 6.) While we recognize that the inducements to as well as the rewards for public service by elected members of the executive and legislative branches of our State government are not precisely parallel to those in private employment or in nonelective positions in government service, nonetheless, in our view retirement benefits constitute as real and substantial a form of compensation as does a pay check. The only significant difference lies in the time of payment. We find nothing in the constitutional provisions on which petitioners rely which forbids deferred payment of compensation currently earned. In a literal sense the right to payment in the future is "received during continuance in office". Retirement benefits are a component of present compensation (cf. Matter of Day v Mruk, 307 N.Y. 349, 354).
We accordingly conclude that there is no substance to petitioners' claims that the executive and legislative retirement plan is unconstitutional. As to petitioners' alleged cause of action in this regard, set forth in their original petition, the motion to dismiss should therefore be denied, and a judgment should be entered below containing a declaration in accordance with the views expressed herein and denying petitioners' prayers for relief. (St. Lawrence Univ. v Trustees of Theol. School of St. Lawrence Univ., 20 N.Y.2d 317, 325, supra.)
By what was termed a "First Amended Petition, Constitutional Points and Authorities" served several weeks after the motion to dismiss the original petition had been made and affidavits in support and opposition exchanged, petitioners sought to lay constitutional challenge to what has been characterized by the Attorney-General on behalf of respondents as "budget statutes providing lump sum 'lulus' in lieu of expenses for members of the Legislature". In the dispositions in the courts below, petitioners' claims in regard to "lulus" appear to have been blanketed in, perhaps on the theory that the contents of the amended petition somehow were incorporated by reference in the original petition, or that the motion to dismiss previously made should be deemed to extend to the amended petition. Be that as it may we find the first amended petition so imprecise and its allegations so inexactly stated that we conclude that it fails to state an identifiable cause of action. Nothing in the writings either at Special Term or at the Appellate Division is of assistance.
Accordingly, on this branch of the case we hold that petitioners have failed to state a cause of action on which declaratory relief may be granted, either in their favor or in favor of respondents. The motion to dismiss made under CPLR 3211 (subd [a], par 7) to the extent applicable to the amended petition should therefore be granted. Petitioners made no statement in their opposing papers or elsewhere, as required by CPLR 3211 (subd [c]) that they desired leave to plead again in the event the motion to dismiss was granted.
There are few principles more deeply rooted in Anglo-American jurisprudence than that "it would be unreasonable to multiply suits by giving every man a separate right of action for what damnifies him in common only with the rest of his fellow-citizens" (Blackstone, Book 4, 167, cited in Doolittle v Supervisors of Broome County, 18 N.Y. 155, 160). The Doolittle decision solidified this into the law of New York almost three generations before the United States Supreme Court applied the same reasoning at the Federal level (Massachusetts v Mellon, 262 U.S. 447; Fairchild v Hughes, 258 U.S. 126); and this rule has been steadily and consistently applied in New York (Matter of Taylor v Sise, 33 N.Y.2d 357; Hidley v Rockefeller, 28 N.Y.2d 439; Matter of Posner v Rockefeller, 26 N.Y.2d 970; St. Clair v Yonkers Raceway, 13 N.Y.2d 72; Schieffelin v Komfort, 212 N.Y. 520; Roosevelt v Draper, 23 N.Y. 318; Doolittle v Supervisors of Broome County, 18 N.Y. 155, supra), as well as by the Federal courts (Socialist Labor Party v Gilligan, 406 U.S. 583; Massachusetts v Mellon, 262 U.S. 447, supra; Fairchild v Hughes, 258 U.S. 126, supra).
In dealing with the "taxpayer's" suit, we are looking at a very narrow area. We are not concerned with the sort of action in which the plaintiffs can show no damage at all, not even damage shared by all other taxpayers (Boyle v Landry, 401 U.S. 77); we are not concerned with the "friendly" suit or the suit brought merely for the purpose of seeking an "advisory" opinion (Muskrat v United States, 219 U.S. 346); nor are we investigating the ever-widening scope of permissible standing in suits challenging administrative action (Matter of Douglaston Civic Assn. v Galvin, 36 N.Y.2d 1; Matter of Burke v Sugarman, 35 N.Y.2d 39; Matter of National Organization for Women v State Div. of Human Rights, 34 N.Y.2d 416; United States v SCRAP, 412 U.S. 669; Data Processing Serv. v Camp, 397 U.S. 150).
The majority here has chosen suddenly to break the venerable rule of pure "taxpayer" standing, and to open wide the gates for taxpayer suits, apparently without limitation or guide. As I read the majority opinion, henceforth any person may sue directly members of the Legislature on a challenge of unconstitutionality to any statute or rule made by that body that has to do with the expenditure of funds. Does this mean, for example that that part of Matter of Taylor v Sise ( 33 N.Y.2d 357, 362-363, supra) in which six of the seven members of this court agreed that criminal defendants had no standing to challenge an aspect of a statute not directly affecting them, but nevertheless indirectly involving the expenditure of funds, would now be decided differently? It might also be asked — is the holding of the majority intended to allow the courts to render "advisory" opinions in "friendly" suits, or must there continue to be a "justiciable" and not an "abstract" issue involved? If the latter, we might also inquire whether the subtle distinctions between "standing" and "justiciability" have been made. Furthermore, can a disgruntled legislator now bring suit to "test" a statute with which he is not in favor before the statute has even become effective or been brought to bear on those for whom its application was intended? If so, it would seem that the judicial branch has become an essential tool in the supervision of another branch of government despite Judge FULD's attempt to argue otherwise in his dissent in St. Clair v Yonkers Raceway ( 13 N.Y.2d 72, 80, supra).
That dissent apparently furnishes the cornerstone for the majority opinion in this case. It seems to me that more than the principle of stare decisis has been instrumental in perpetuating the Blackstone, Doolittle, St. Clair rule down to the present. Certainly, the unknown ramifications and seemingly limitless scope opened up by the proposal in the St. Clair dissent, adopted today by the majority, have kept intact this last protection against any nuisance or crackpot litigation. Even a later dissent (apparently also relied on by the majority here) in Hidley v Rockefeller ( 28 N.Y.2d 439, supra) proceeded on the ground that the plaintiffs had, in fact, been directly aggrieved and that their particular interest (p 443) "is readily distinguishable from the interest shared by taxpayers generally (see St. Clair v Yonkers Raceway, 13 N.Y.2d 72; Matter of Posner v Rockefeller, 26 N.Y.2d 970)".
The complicated and far-reaching aspects of the standing problem have been inadequately briefed and argued in this case. Beyond that, we might be lacking in caution if we were to wipe away all standing requirements without treating such closely related problems as "advisory opinions", "justiciability", "ripeness", etc. I am of the firm opinion, moreover, that this is an area best dealt with by legislation much the same as was done in the instance of the class action (see Moore v Metropolitan Life Ins. Co., 33 N.Y.2d 304, 313; L 1975, ch 207 [eff Sept. 1, 1975]). Under properly drawn and thought out legislation reasonable limitations could be implemented to prevent litigation from running riot. For instance: "[O]bjections to the granting of standing [to Federal taxpayers] have been the sensitive nature of many federal appropriations, especially those for defense and foreign aid, and the fear of too many suits with attendant inconvenience in the daily affairs of government. However, the former objection can be met by denying standing as to expenditures in those spheres, and the fear of opening the floodgates of litigation may be minimized by making the taxpayer-citizen pay the government's costs of litigation in cases of frivolous constitutional claims." (Note, 77 Harv L Rev 1358-1359). Such appropriate provisions could be drawn in by proper legislation.
In his dissent in St. Clair, Judge FULD found it significant that under section 51 of the General Municipal Law taxpayers can challenge local governmental action. I find it significant also, but for the reason that it is a detailed statute prescribing, inter alia, for the posting of a suitable bond as a prerequisite to bringing suit. Significant also is the fact that it was the Legislature which acted to revise the common-law rule, not the court.
In short, the decision of the majority on the standing question in this case would seem to be precipitate, leaving too many unsolved problems which present situations that must be resolved with meticulous care, well outside the pale of judicial authority; and I am unable to join them in a venture leaving so many loose ends.
Chief Judge BREITEL and Judges JASEN, WACHTLER and FUCHSBERG concur with Judge JONES; Judge GABRIELLI concurs in result only in a separate opinion; Judge COOKE taking no part.
Order modified, without costs, in accordance with the opinion herein and, as so modified, affirmed.