Burns v. Egan

• Court: New York Supreme Court
• Writing for the Court: JOHN G. CONNOR
• Citation: 492 N.Y.S.2d 666,129 Misc.2d 130
• Parties: Heywood BURNS, Ramsay Clark, Rev. Graham Hodges, Dorothy M. Keller and Lanny E. Walter, Plaintiffs, v. John C. EGAN, as Commissioner of the New York State Office of General Services; Edward V. Regan, as Comptroller of the State of New York; Michael Finnerty, as the New York State Director of the Budget; Thomas A. Coughlin, III, as Commissioner of the New York State Department of Correctional Services; The New York State Urban Development Corporation: and William Stern, as Chairman of the New York State Urban Development Corporation, Defendants.
• Decision Date: 01 July 1985

Page 666

492 N.Y.S.2d 666 129 Misc.2d 130 Heywood BURNS, Ramsay Clark, Rev. Graham Hodges, Dorothy M.
Keller and Lanny E. Walter, Plaintiffs,
v.
John C. EGAN, as Commissioner of the New York State Office
of General Services; Edward V. Regan, as Comptroller of the
State of New York; Michael Finnerty, as the New York State
Director of the Budget; Thomas A. Coughlin, III, as
Commissioner of the New York State Department of
Correctional Services; The New York State Urban Development
Corporation: and William Stern, as Chairman of the New York
State Urban Development Corporation, Defendants. Supreme Court, Special Term,
Albany County. July 1, 1985.

Page 667

Madeline Kochen, and Arthur Eisenberg, New York Civil Liberties Union, New York City, for plaintiffs.

Robert Abrams, Atty. Gen., Albany (Lawrence L. Doolittle, Albany, of counsel), for defendants.

JOHN G. CONNOR, Justice.

This decision is rendered on plaintiffs' motion for reargument of this Court's decision dated April 10, 1985 and judgment entered thereon April 19, 1985 in Albany County. Before addressing the legal issues, a review of the background of this and a related case is necessary.

In 1983 the Legislature enacted an elaborate funding scheme for the development of State correctional facilities (McKinney's Uncons.Laws of N.Y., Sec. 6267 L.1983, ch. 56, as amended by L.1983, chs. 712, 713.

The purpose of the statute was to finance the construction of new correctional facilities as well as, the renovation and expansion of existing facilities to alleviate prison overcrowding caused by an "unprecedented growth" in the population of the State's correctional facilities (Prison Construction Act Sec. 1). The sum of $284,200,000.00 was appropriated from the State Capital Projects Fund to the State Department of Correctional Services to accomplish that purpose (Prison Construction Act Sec. 3). ¹

Additionally, the statute authorizes the State Urban Development Corporation (UDC) to issue bonds and notes totalling $380,000,000.00. The proceeds of these bonds and notes are to be used to repay the Department of Corrections, which would apparently then convey title to newly developed correctional facilities to UDC (Prison Construction Act Secs. 5, 6). Thereafter, the State, through the Commissioner of General Services, is authorized to lease the facilities from UDC and in turn sublet them to the Department of Corrections. The State's lease from UDC must specify a term no shorter than the debt service period on the UDC bonds and notes. Also, the rental payments are to be equal to the debt service on the bonds and notes. At the expiration or termination of the lease, the State is to purchase the facilities from UDC at a nominal price (Prison Construction Act sec. 7).

It is interesting to note that this elaborate financing scheme was devised after the voters of this State, by a referendum in November of 1981, defeated a direct State bond issue of $500,000,000.00 for the construction and renovation of correctional facilities (see L.1981, ch. 850, sec. 10).

In a previous action, plaintiffs, joined by several organizations including the New York State Coalition for Criminal Justice, Inc., challenged the constitutionality of the statutory financing scheme asserting legal

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standing as taxpayers. The basis of their constitutional challenge was, inter alia, that the statute in reality caused the State to incur a long-term debt without voter approval in contravention of N.Y. Constitution, Article VII, sec. 11. This Court, by judgment entered December 22, 1983 in Albany County, determined that all plaintiffs in that action lacked taxpayer standing and dismissed the case. One cause of action dealing with affirmative action provisions of the Prison Construction Act was not dismissed, but is not at issue here. The Appellate Division, Third Department, held that while the organizations lacked taxpayer standing, the individual plaintiffs in that action (the only plaintiffs in the present case) had taxpayer standing (New York State Coalition for Criminal Justice v. Coughlin, 103 A.D.2d 40, 42-44, 479 N.Y.S.2d 850). On the merits, the Appellate Division upheld the constitutionality of the statute and affirmed summary judgment in favor of defendants (id. at 45-46, 479 N.Y.S.2d 85).

On appeal, the Court of Appeals affirmed, but on the ground that the individual plaintiffs lacked taxpayer standing and, therefore, never addressed the merits (New York State Coalition for Criminal Justice v. Coughlin, 64 N.Y.2d 660, 662, 485 N.Y.S.2d 247, 474 N.E.2d 607). Significantly, the Court of Appeals and the Appellate Division expressly refused to consider voter standing since plaintiffs improperly raised that issue for the first time on appeal (New York State Coalition for Criminal Justice v. Coughlin, 64 N.Y.2d 660, 662 n., 485 N.Y.S.2d 247, 474 N.E.2d 607, affg. 103 A.D.2d 40, 43, 479 N.Y.S.2d 85, supra ). ²

The individual plaintiffs from Coughlin I brought the present action challenging the constitutionality of the statutory financing scheme solely on the basis that it violates N.Y. Constitution, article VII, sec. 11. Plaintiffs assert standing as voters and taxpayers. Defendants moved for summary judgment dismissing the complaint and by order to show cause, plaintiffs cross-moved for leave to serve an amended complaint containing more specific allegations and seeking to have...