Hunter v. City of New York

Decision Date28 June 1977
Citation396 N.Y.S.2d 186,58 A.D.2d 136
Parties, 3 Media L. Rep. 1025 William F. HUNTER et al., Plaintiffs-Appellants, v. CITY OF NEW YORK et al., Defendants-Respondents.
CourtNew York Supreme Court — Appellate Division

Murray A. Gordon, New York City, of counsel (Ronald H. Shectman, Kenneth E. Gordon and Andrew Irving, New York City with him on the brief, Murray A. Gordon, P. C., New York City, attys.), for plaintiffs-appellants.

Alfred Weinstein, New York City, of counsel (L. Kevin Sheridan and Rosemary Carroll, New York City, with him on the brief, W. Bernard Richland, Corp. Counsel, New York City), for defendants-respondents.

Carter Burden, New York City, and Paul E. Kerson, Bayside, for New York City Council Members Carter Burden, Henry Stern and Robert F. Wagner, Jr., amicus curiae.

Before KUPFERMAN, J. P., LUPIANO, BIRNS and CAPOZZOLI, JJ.

BIRNS, Justice:

In this class action, plaintiffs, occupying a variety of positions in the civil service of New York City, have challenged the constitutionality of a law (Local Law No. 1 of 1975) requiring financial disclosure by City employees earning a salary of $25,000 or more. They seek to enjoin the implementation and enforcement of the Law.

Special Term, upholding the constitutionality of that law in all respects, granted summary judgment to defendants.

The Law is applicable to managerial and non-managerial employees, whether exempt or non-exempt, and not only encompasses present office holders and elected officials, but also candidates for certain municipal offices.

Although the Law does not contain a declaration of policy, it is clear from the record before us that the object of this ordinance is to discourage and detect corruption and the appearance of corruption, avoid conflicts of interest and instill in the public a sense of confidence in the integrity and impartiality of its public servants. "(A) compelling state interest in preventing official corruption justifies the risk which such legislation entails." (The Constitutionality of Financial Disclosure Laws, 59 Cornell L.Rev. 345-346.)

Each person to whom the Law applies is required to provide answers to certain questions concerning the financial affairs of the employee and his or her spouse, if any, relating to outside sources of income, capital gains, investments, real estate, honoraria, gifts received, creditors and trusts in which the employee or spouse has a beneficial interest. A completed questionnaire is to be filed annually with the City Clerk and is to be made available for inspection by any taxpayer. An intentional violation of Local Law 1/75 constitutes a misdemeanor punishable by a fine of $1,000 or a prison term of not more than one year or both. Enforcement and implementation of the Law was enjoined by the issuance of a preliminary injunction. By order dated March 28, 1977 this court granted plaintiffs' motion for a stay of execution and enforcement of the order and judgment of Special Term, pending hearing and determination of this appeal.

Plaintiffs contend that the legislation infringes upon their right of privacy in their financial and marital relationships and has a chilling effect upon their right of association, belief and expression. Plaintiffs argue that these are fundamental rights under the Constitutions and therefore the legislation should be examined with strict scrutiny (Buckley v. Valeo, 424 U.S. 1, 66, 96 S.Ct. 612, 657, 46 L.Ed.2d 659, 714).

Plaintiffs further claim that there is no rational basis for distinguishing between employees earning $25,000 or more and those earning less than $25,000 and that the Law is vague and ambiguous.

Respondents seek succor in Executive Order No. 10, which was constitutionally evaluated by the Court of Appeals in Evans v. Carey, 40 N.Y.2d 1008, 391 N.Y.S.2d 393, 359 N.E.2d 983, as justifying financial disclosure by government employees.

Plaintiffs point out, however, that Local Law 1/75, unlike Executive Order No. 10, contains no device to afford protection to claims of privacy. They argue that the legislation denies due process of law in that no procedure is made available whereby the propriety or need for disclosure of personal matters unrelated to a particular employee's job can be challenged in individual cases.

Evans, supra, has resolved most of the issues presented by this appeal.

It is recognized today that " '(t)he public employee surely enjoys the status of a person protected by constitutional right. Public employment does not deprive him of constitutional protection' ". (City of Carmel-by-the-Sea v. Young, 2 Cal.3d 259, 265, 85 Cal.Rptr. 1, 5, 466 P.2d 225, 229.) Concededly, "(f)inancial transactions can reveal much about a person's activities, associations, and beliefs. At some point, governmental intrusion upon these areas would implicate legitimate expectations of privacy." (California Bankers Assn. v. Shultz, 416 U.S. 21, 78-79, 94 S.Ct. 1494, 1526, 39 L.Ed.2d 812, 850; Powell, J., concurring, joined by Blackmun, J.) Although there is a growing concern with issues of privacy under the Constitution (Carmel v. Young, supra, 85 Cal.Rptr. 6-7, 466 P.2d 230-231), Evans, supra, has put to rest any claim that a requirement of financial disclosure by governmental employees is constitutionally offensive "where, as here, the rights and interests of government employees, as citizens, were balanced against the rights and interests of the government, as employer." (40 N.Y.2d at 1009, 391 N.Y.S.2d at 393-394, 359 N.E.2d at 983.)

Plaintiff's contention that the requirement of disclosure by spouses is violative of a zone of privacy enunciated in Griswold v. State of Connecticut, 381 U.S. 479, 484-485, 85 S.Ct. 1678, 1681-82, 14 L.Ed.2d 510, 514-515 was likewise rejected by our Court of Appeals in Evans, supra. Involved in Griswold, supra, was a zone of privacy circumscribed by the most intimate phases of marriage and personal life, clearly falling within the scope of privacy. Before us is a vastly different situation, a requirement that the financial affairs of those who are paid by the municipality be disclosed to the public. Although Governor Carey's Executive Order did not require that the financial interests of spouses be disclosed, nevertheless, the order did recite that until such time as a Board established by the order issues forms for such disclosure statements, the form appended to the order and made part thereof was to be utilized. That form, which was undoubtedly before both the Appellate Division and the Court of Appeals, and is appended to defendants' briefs here, plainly requires disclosure by an employee about himself or herself and his or her spouse.

Nor does the requirement that those earning an annual salary of $25,000 or more disclose, without any showing that those persons exercised discretion or perform management functions, constitute a constitutionally impermissible classification. A similar requirement was upheld by our Court of Appeals in Evans, supra, and by the Illinois court in Illinois State Employees Assn. v. Walker, 57 Ill.2d 512, 315 N.E.2d 9, cert. den. sub nom. Troopers Lodge No. 41 v. Walker, 419 U.S. 1058, 95 S.Ct. 642, 42 L.Ed.2d 656. That Governor Carey's order starts at a $30,000 level and exempts those in nonexempt, classified competitive services does not change the fact that the classification in Local Law 1/75 has a rational basis.

The contention that the Law challenged is vague and ambiguous is one that the court need not pass upon at this time. Plaintiffs do not claim that the defects in draftsmanship, if any, presently pose a problem to them; rather, the issue is tendered in an abstract manner. Our Court of Appeals has adopted the view and language in the United States Supreme Court and held: " 'Constitutional questions are not to be decided hypothetically' ". (People v. Faxlanger, 1 N.Y.2d 393, 395, 153 N.Y.S.2d 193, 194, 135 N.E.2d 705, quoting Annister Mfg. Co. v. Davis, 301 U.S. 337, 353, 57 S.Ct. 816, 81 L.Ed. 1143.)

While the cases relied upon by the Court of Appeals in Evans, supra, (United Public Workers v. Mitchell, 330 U.S. 75, 67 S.Ct. 556, 91 L.Ed. 754; Civil Serv. Comm. v. Letter Carriers, 413 U.S. 548, 93 S.Ct. 2880 37 L.Ed.2d 796; Broadrick v. Oklahoma, 413 U.S. 601, 93 S.Ct. 2908, 37 L.Ed.2d 830) support as constitutional, government intrusion into the extra-governmental activities of its employees, it is not without significance that the Court of Appeals supplemented this compilation of cases with Illinois State Employees Assn. v. Walker, supra.

We find in Walker, supra, that the Illinois court was concern with an executive order requiring the filing of a statement disclosing the financial interests of the employee, and his or her spouse and members of the immediate family of the employee living with him, but by which public disclosure of the data was to be limited and regulated by a Board of Ethics, a...

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