City of New York v. State

• Citation: 631 N.Y.S.2d 553,86 N.Y.2d 286,655 N.E.2d 649
• Parties: , 655 N.E.2d 649, 103 Ed. Law Rep. 1146 CITY OF NEW YORK et al., Appellants, v. STATE of New York et al., Respondents.
• Decision Date: 15 June 1995
• Court: New York Court of Appeals

Page 553

631 N.Y.S.2d 553

86 N.Y.2d 286, 655 N.E.2d 649, 103

Ed. Law Rep. 1146

CITY OF NEW YORK et al., Appellants, v. STATE of New York et al., Respondents.

Court of Appeals of New York.

June 15, 1995.

Paul A. Crotty, Corporation Counsel of New York City (Leonard Koerner, Lorna B. Goodman, Pamela Seider Dolgow, David B. Goldin, Elizabeth S. Natrella, Florence A. Hutner and Shari M. Goodstein, of counsel), and Cleary, Gottlieb, Steen & Hamilton, New York City (Evan A. Davis, Lawrence T. Gresser, Denise C. Morgan and Marcia L. Narine, of counsel), for appellants.

Dennis C. Vacco, Attorney-General, New York City (Mark G. Peters, Victoria A. Graffeo, Andrea Green, Harvey J. Golubock, Jeffrey I. Slonim and Clement J. Colucci, of counsel), for respondents.

Stroock & Stroock & Lavan, New York City (Alan M. Klinger and Adam S. Grace, of counsel), Rhonda Weingarten and Frederick K. Reich for United Federation of Teachers, amicus curiae.

OPINION OF THE COURT

LEVINE, Judge.

The City of New York, Board of Education of the City, its Mayor and Chancellor of the City School District (hereinafter the municipal plaintiffs) have brought this action against the State and various State officials seeking declaratory and injunctive relief. They allege three causes of action in their amended complaint: (1) that the present State statutory scheme for funding public education denies the school children of New York City their educational rights guaranteed by the Education Article of the State Constitution (N.Y. Const., art. XI, § 1); (2) that the State's funding of public schools provides separate and unequal treatment for the public schools of New York City in violation of the Equal Protection Clauses of the Federal and State Constitutions (U.S. Const. 14th Amend.; N.Y. Const., art. I, § 11); and (3) that the disparate impact of the State's funding scheme for public education on members of racial and ethnic minority groups in New York City violates title VI of the Federal Civil Rights Act of 1964 (42 U.S.C. § 2000d et seq.) as amended and its implementing regulations.

We agree with the courts below that the municipal plaintiffs lack the legal capacity to bring this suit against the State. Despite their contrary claims, the traditional principle throughout the United States has been that municipalities and other local governmental corporate entities and their officers lack capacity to mount constitutional challenges to acts of the State and State legislation. This general incapacity to sue flows from judicial recognition of the juridical as well as political relationship between those entities and the State. Constitutionally as well as a matter of historical fact, municipal corporate bodies--counties, towns and school districts--are merely subdivisions of the State, created by the State for the convenient carrying out of the State's governmental powers and responsibilities as its agents. Viewed, therefore, by the courts as purely creatures or agents of the State, it followed that municipal corporate bodies cannot have the right to contest the actions of their principal or creator affecting them in their governmental capacity or as representatives of their inhabitants. Thus, the United States Supreme Court has held:

" 'A municipal corporation is simply a political subdivision of the State, and exists by virtue of the exercise of the power of the State through its legislative department. The legislature could at any time terminate the existence of the corporation itself, and provide other and different means for the government of the district comprised within the limits of the former city. The city is the creature of the State.' " (Trenton v. New Jersey, 262 U.S. 182, 189-190, 43 S.Ct. 534, 537, 67 L.Ed. 937, quoting Worcester v. Street Ry. Co., 196 U.S. 539, 548-549, 25 S.Ct. 327, 329, 49 L.Ed. 591.)

"The distinction between the municipality as an agent of the State for governmental purposes and as an organization to care for local needs in a private or proprietary capacity has been applied in various branches of the law of municipal corporations" (id., at 191, 43 S.Ct., at 538 [challenge to New Jersey statute under Due Process and Contract Clauses of the U.S. Constitution].

"A municipal corporation, created by a state for the better ordering of government, has no privileges or immunities under the federal constitution which it may invoke in opposition to the will of its creator" (Williams v. Mayor, 289 U.S. 36, 40, 53 S.Ct. 431, 432, 77 L.Ed. 1015 [Cardozo, J.] [Equal Protection Clause challenge to Maryland statute].

New York has long followed the Federal rationale for finding that municipalities lack the capacity to bring suit to invalidate State legislation (see, County of Albany v. Hooker, 204 N.Y. 1, 97 N.E. 403; City of New York v. Village of Lawrence, 250 N.Y. 429, 165 N.E. 836; Robertson v. Zimmermann, 268 N.Y. 52, 196 N.E. 740). As stated in Black Riv. Regulating Dist. v. Adirondack League Club, 307 N.Y. 475, 121 N.E.2d 428, appeal dismissed 351 U.S. 922, 76 S.Ct. 780, 100 L.Ed. 1453:

"The courts of this State from very early times have consistently applied the Federal rule in holding that political power conferred by the Legislature confers no vested right as against the government itself. * * * The concept of the supreme power of the Legislature over its creatures has been respected and followed in many decisions." (Id., at 488, 121 N.E.2d 428.)

The rationale was succinctly described in Matter of County of Cayuga v. McHugh, 4 N.Y.2d 609, 176 N.Y.S.2d 643, 152 N.E.2d 73:

"Counties, as civil divisions of a State, had their origin in England and were formed to aid in the more convenient administration of government * * *. So it is today that counties are mere political subdivisions of the State, created by the State Legislature and possessing no more power save that deputed to them by that body." (Id., at 614, 176 N.Y.S.2d 643, 152 N.E.2d 73.)

Moreover, our Court has extended the doctrine of no capacity to sue by municipal corporate bodies to a wide variety of challenges based as well upon claimed violations of the State Constitution (see, Black Riv. Regulating Dist. v. Adirondack League Club, supra; City of New York v. Village of Lawrence, supra; County of Albany v. Hooker, supra ).

Municipal officials and members of municipal administrative or legislative boards suffer the same lack of capacity to sue the State with the municipal corporate bodies they represent (see, Williams v. Mayor, 289 U.S. 36, 53 S.Ct. 431, 77 L.Ed. 1015, supra). As we held in Black Riv. Regulating Dist. v. Adirondack League Club, 307 N.Y., at 489, 121 N.E.2d 428, supra:

"As we have pointed out, the district board has no special character different from that of the State. Its only purpose is to construct reservoirs and that, concededly, is a State purpose in the interest of public health, safety and welfare (Conservation Law, § 431). Not only as a board, but also as individuals, the plaintiffs are without power to challenge the validity of the act or the Constitution" (emphasis supplied).

The only exceptions to the general rule barring local governmental challenges to State legislation which have been identified in the case law are: (1) an express statutory authorization to bring such a suit (County of Albany v. Hooker, 204 N.Y., at 9, 97 N.E. 403, supra); (2) where the State legislation adversely affects a municipality's proprietary interest in a specific fund of moneys (County of Rensselaer v. Regan, 173 A.D.2d 37, 578 N.Y.S.2d 274, affd. 80 N.Y.2d 988, 592 N.Y.S.2d 646, 607 N.E.2d 793; Matter of Town of Moreau v. County of Saratoga, 142 A.D.2d 864, 531 N.Y.S.2d 61); (3) where the State statute impinges upon "Home Rule" powers of a municipality constitutionally guaranteed under article IX of the State Constitution (Town of Black Brook v. State of New York, 41 N.Y.2d 486, 393 N.Y.S.2d 946, 362 N.E.2d 579); and (4) where "the municipal challengers assert that if they are obliged to comply with the State statute they will by that very compliance be forced to violate a constitutional proscription" (Matter of Jeter v. Ellenville Cent. School Dist., 41 N.Y.2d 283, 287, 392 N.Y.S.2d 403, 360 N.E.2d 1086 [citing Board of Educ. v. Allen, 20 N.Y.2d 109, 281 N.Y.S.2d 799, 228 N.E.2d 791, affd. 392 U.S. 236, 88 S.Ct. 1923, 20 L.Ed.2d 1060].

The arguments by the municipal plaintiffs favoring their capacity to sue are unpersuasive. First, they contend that our decision in Levittown (Board of Educ., Levittown Union Free School Dist. v. Nyquist, 57 N.Y.2d 27, 453 N.Y.S.2d 643, 439 N.E.2d 359) constitutes controlling precedent in favor of their capacity to sue. As the municipal plaintiffs have virtually conceded, however, when Levittown reached the Court of Appeals, the State did not appeal on the capacity to sue issue. The issue of lack of capacity to sue does not go to the jurisdiction of the court, as is the case when the plaintiffs lack standing. Rather, lack of capacity to sue is a ground for dismissal which must be raised by motion and is otherwise waived (CPLR 3211[a][3]; [e]. It follows, then, that if the defense of lack of capacity to sue can be waived by merely failing to raise it, it may also be abandoned on appeal and, in fact, was abandoned by the State when its appeal in Levittown reached our Court. Therefore, the Levittown decision is not precedent for the municipal plaintiffs' capacity to sue in this case.

Alternatively, the municipal plaintiffs argue that our decision in Community Bd. 7 v. Schaffer, 84 N.Y.2d 148, 615 N.Y.S.2d 644, 639 N.E.2d 1 supports their capacity to sue in this case. To be sure, Community Bd. 7 held that a municipal body's capacity to sue may arise by necessary implication. However, Community Bd. 7 unequivocally holds that, in the absence of express authority to bring the specific action in question the plaintiff must establish a legislative intent to confer such capacity to sue by inference....