Prodell v. State

• Citation: 630 N.Y.S.2d 880,166 Misc.2d 608
• Parties: , 103 Ed. Law Rep. 346 Albert G. PRODELL, et al., Individually and on Behalf of All Others Similarly Situated, et al., Plaintiffs, v. STATE of New York et al., Defendants.
• Decision Date: 29 June 1995
• Court: United States State Supreme Court (New York)

Page 880

630 N.Y.S.2d 880

166 Misc.2d 608, 103 Ed. Law Rep. 346

Albert G. PRODELL, et al., Individually and on Behalf of All

Others Similarly Situated, et al., Plaintiffs, v. STATE of New York et al., Defendants.

Supreme Court, Albany County.

June 29, 1995.

J. Scott Greer, Lewis & Greer, P.C., Poughkeepsie, for plaintiffs.

Dennis C. Vacco, Attorney General of the State of New York (Lawrence L. Doolittle, Assistant Attorney General), Albany, for defendant, State of New York.

Jeffrey P. Sharkey, Murphy, Bartol & O'Brien, Mineola, for defendant, Town of Brookhaven.

LAWRENCE E. KAHN, Justice.

The Shoreham Nuclear Power Plant continues to be a costly white elephant whose footfall is heard in many quarters. The essence of the dispute before the court is the question of who shall pay the multi-million dollar school tax refund due its previous owner. By virtue of the Suffolk County Tax Act (SCTA), that burden would seem to fall squarely on the shoulders of the taxpayers that reside in the Shoreham-Wading River School District. Plaintiffs seek to change that result and brought the instant action seeking injunctive and declaratory relief based upon the alleged unconstitutionality of Chapter 1018 of the Laws of 1983.

Previously, all parties had moved for summary judgment pursuant to CPLR 3212. Defendant Town of Brookhaven (Town) had also sought a change of venue to Suffolk County. This court granted summary judgment dismissing the action as premature. The Appellate Division subsequently modified that order finding that the action was ripe for a determination on the merits and remitted the matter to this court. See Prodell v. State of New York, 211 A.D.2d 966, 621 N.Y.S.2d 712.

The question of venue must, of course, be decided first. The defendant Town did not make a statutory demand for change of venue pursuant to CPLR 511(a). The Town nevertheless contends that, pursuant to CPLR 504(2), this action should be venued in Suffolk County. The statute provides that the place of trial for all actions against a town shall be in the county where the town is situated. CPLR 504(2). "Despite its apparently mandatory tone, CPLR 504 does not foreclose the court from considering the discretionary grounds for change ... of venue set forth in CPLR 510(3)." Messinger v. Festa, 94 A.D.2d 792, 463 N.Y.S.2d 235 (citations omitted). The Town must therefore demonstrate that the "convenience of material witnesses and the ends of justice will be promoted by the change" of venue sought. CPLR 510(3).

However, CPLR 511(a) also requires that a motion for change of place of trial under these circumstances "shall be made within a reasonable time after commencement of the action." This action was commenced during January, 1986. Defendant Town answered on March 27, 1986. This motion for change of venue was made on September 15, 1993. Since the operative facts controlling any decision regarding appropriate venue were known to the Town from the outset of the litigation, the seven and one-half year period that has elapsed cannot be said to be a "reasonable time after commencement." CPLR 511(a); Walsh v. J.W. Mays, Inc., 168 A.D.2d 444, 562 N.Y.S.2d 564. Moreover, although the policy of minimizing governmental inconvenience is a factor in the determination of a CPLR 510(3) motion (JoAnn Holmes v. Greenlife Landscaping, Inc., 171 A.D.2d 916, 917, 567 N.Y.S.2d 193), it is not the only factor. Here, there has been no showing made regarding the identities and occupations of the material witnesses who would need to travel to Albany County to participate in this litigation. Indeed, the motion is only supported by an attorney's affidavit which "supplies no basis for finding that ... the convenience of material witnesses and the ends of justice will be promoted by the change." Id.

Accordingly, the venue of this action shall remain Albany County.

Turning to the merits, it is first noted that the SCTA was amended in 1980 to provide that towns in Suffolk County and not school districts would be responsible for school tax refunds based upon court-ordered reassessments. This codified an ongoing de facto practice previously at odds with State law that requires school districts to refund to a taxpayer excess school taxes paid as a result of an overassessment. Real Prop. Tax L. 726(1)(c); see Board of Education, Shoreham-Wading River Central School Dist. v. State of New York, 111 A.D.2d 505, 488 N.Y.S.2d 887.

The amendment of the SCTA under attack in this action was made by the Legislature in 1983 and provides that school tax refunds shall not be charged by a town to a school district "except where the assessment subject to such proceeding is applicable to property improved by a nuclear powered electric generating facility." Laws of 1983, Chapter 1018, Section 3. The Stated legislative purpose behind the 1983 amendment is succinctly set forth in the Assembly Memorandum in Support of Legislation:

This bill is to protect Suffolk Co. taxpayers from paying certain tax refunds for school districts in which they do not live. This bill is designed to prevent the taxpayers in Brookhaven Township from paying any tax refund on behalf to (sic) the Shoreham-Wading River School District due to Grievance system settlements on the Lilco Nuclear Power Plant. The taxpayers of that school district have reaped windfall taxes from that plant and should therefore pay any refunds. (Plaintiffs Exhibit "C" ).

Arguing in support of the amendment, the Assembly sponsor Stated that "nuclear powered electric generating facilities have created 'tax havens' resulting in lower school taxes for residents of school districts which contain them. Taxpayers not located in those 'tax havens' school districts should not have to pay school tax refunds to the power facilities receiving assessment reductions." New York State Assembly 1983 Committee Bill Memorandum, Assembly Bill 3969, Plaintiffs' Exhibit "C". The sponsor further noted that it "would be an unconscionable burden to place on the taxpayers of Brookhaven Township when the people of the Shoreham-Wading River School District reaped the original eighteen million tax windfall." Id.

Plaintiffs contend that the 1983 amendment to the SCTA violates the equal protection clause of the New York State and Federal Constitutions ¹ because it creates a classification that is arbitrary, capricious and discriminatory.

"Taxing statutes, like other social and economic legislation that neither classify on the basis of a suspect class nor impair a fundamental right, must be upheld if the challenged classification is rationally related to achievement of a legitimate State purpose." Trump v. Chu, 65 N.Y.2d 20, 25, 489 N.Y.S.2d 455, 478 N.E.2d 971; Town of Tonawanda v. Ayler, 68 N.Y.2d 836, 837, 508 N.Y.S.2d 171, 500 N.E.2d 869. Moreover, "there is a strong presumption that statutes are constitutional, such that 'unconstitutionality must be demonstrated beyond a reasonable doubt.' " Town of Brookhaven v. State of New York, 142 A.D.2d 338, 340, 535 N.Y.S.2d 773. It must also be presumed "that the Legislature has made sufficient inquiry to find the facts necessary to support the legislation as well as the need or desirability of the action." Oelbermann Associates v. Borov, 141 Misc.2d 838, 842, 535 N.Y.S.2d 315 (citations omitted).

It need not be said that the State has a legitimate interest in ensuring that similarly situated taxpayers pay the same share of the tax burden. Foss v. City of Rochester, 65 N.Y.2d 247, 254, 491 N.Y.S.2d 128, 480 N.E.2d 717. "Equality and uniformity of taxation are the aim, for, if one taxpayer escapes payment, the burden is placed--disproportionately and unfairly--on another." Johnson v. Smith, 297 N.Y. 165, 170, 77 N.E.2d 386. Here, the tax burden arrives in the shape of liability for court-ordered real property tax refunds. Since these refunds will ultimately be paid by the taxpayers of the responsible governmental subdivision, the State has an interest in seeing that the burden impacts similarly situated taxpayers in a uniform manner.

The 1983 amendment to the SCTA defines a class--taxpayers residing in school districts in which another taxpayer from that school district has received a court-ordered real property tax assessment reduction with respect to property improved by a nuclear powered electric generating facility. These taxpayers, by this amendment, have been afforded the distinction of being the only class of Suffolk County taxpayers that may not look to their town, the tax-assessing body, to refund overpaid school taxes. The constitutionality of this amendment thus turns on whether this classification rationally relates to the...