Rapp v. Carey

CourtNew York Court of Appeals
Citation44 N.Y.2d 157,404 N.Y.S.2d 565,375 N.E.2d 745
Parties, 375 N.E.2d 745 Susan RAPP et al., and all other similarly situated employees of the State of New York, Respondents, v. Hugh L. CAREY, as Governor, et al., Appellants.
Decision Date29 March 1978
Louis J. Lefkowitz, Atty. Gen., New York City (Michael F. Colligan, Ruth Kessler Toch, Albany, Peter M. Fishbein, Richard C. Seltzer and Ettie Ward, New York City, of counsel), for appellants

Bartley J. Costello, III, and Bernard J. Malone, Jr., Albany, for respondents.


BREITEL, Chief Judge.

Defendants, the Governor and the State Board of Public Disclosure, appeal from the Appellate Division's unanimous affirmance of an order granting summary judgment to plaintiffs, State employees, and declaring the Governor's Executive Order No. 10.1 (9 NYCRR 3.10) unconstitutional. The disputed order purports to require a wide range of State employees within the executive branch to file multidetailed personal financial statements with the Board of Public Disclosure, and to abstain from various political and business activities.

The issue is whether under the State Constitution the Governor may, by executive order, without benefit of authorizing legislation, mandate on State employees, many not subject to removal by the Governor, the filing of financial disclosure statements, and the abstention from activities not prohibited by statute. Not at issue is the wisdom of requiring such statements and prohibiting the proscribed activities, or the hardly doubted power to impose such requirements by appropriate legislation.

There should be an affirmance. Neither in the Constitution nor in the statutes is there express or implied authority for the Governor to exact of State employees compliance with the requirements of Executive Order No. 10.1. Nor does the Governor's order merely implement existing legislation relating to conflicts of interest. The order reaches beyond that, and assumes the power of the Legislature to set State policy in an area of concededly increasing public concern.

The executive order was promulgated by the Governor on October 22, 1976. * Paragraph II, which requires annual filing of a financial disclosure statement, prohibits service in political party office, and regulates outside employment and activity, applies to the following employees: (1) employees of the executive department and other State departments and agencies headed by gubernatorial appointees or nominees (a) whose annual State salary is at least $30,000; or (b) who hold nonsecretarial, nonclerical positions classified as managerial or confidential; and (2) members of the governing bodies of State entities, if the member is appointed or nominated by the Governor The agencies purportedly covered by the executive order are not confined to the executive department, a department that is but one of many in the executive branch. It also extends to other State departments and many so-called independent agencies, such as public authorities, over which the Governor had no general control or powers of supervision or operation.

and receives more than $15,000 per year in compensation from the State. Paragraph III, which also requires filing of a financial disclosure statement, but does not contain the same prohibitions on outside activity, applies to members of governing bodies of State entities, if the member is appointed by the Governor and receives State compensation which amounts to no more than $15,000. The State Board of Public Disclosure, first established by the Governor in Executive Order No. 10 (9 NYCRR 3.10), an earlier more limited attempt to regulate potential conflicts of interest, was continued to administer the new executive order.

On November 1, 1976, the State board directed covered employees to complete financial disclosure statements and return them to the board by December 1. This action was brought by covered employees to have the order declared unconstitutional and to enjoin its enforcement. Special Term granted the requested relief, and a unanimous Appellate Division affirmed.

Not at issue is the constitutionality of a statute requiring financial disclosure by public employees and officers. It was implied, necessarily, that a statute to that effect would be valid in Evans v. Carey, 40 N.Y.2d 1008, 391 N.Y.S.2d 393, 359 N.E.2d 983, affg 53 A.D.2d 109, 385 N.Y.S.2d 965; see, also, Hunter v. City of New York, 44 N.Y.2d ---, --- N.Y.S.2d ---, --- N.E.2d ----, decided simultaneously with this case, affg on opn at 58 A.D.2d 136, 396 N.Y.S.2d 186. In Evans, however, although as here, an executive order was involved, no contention was made that a statute, rather than an executive order, was necessary to compel the desired financial disclosure or prohibit the described activities. Plaintiffs in Evans instead argued that financial disclosure could not be required of public employees at all.

In Hunter v. City of New York, 58 A.D.2d 136, 140-141, 396 N.Y.S.2d 186, 189, affd. 44 N.Y.2d ---, --- N.Y.S.2d ---, --- N.E.2d ----, supra, Mr. Justice Birns provides a framework for evaluating contentions that financial disclosure requirements intrude on an asserted right of privacy. The issue is actually one of due process of law, since privacy is but a subcategory of liberty, which may not be denied without due process. The test, then, is whether there has been " 'protection of the individual against arbitrary action' " (58 A.D.2d, p. 141, 396 N.Y.S.2d p. 190, quoting Ohio Bell Tel. Co. v. Commission, 301 U.S. 292, 302, 57 S.Ct. 724, 81 L.Ed. 1093 (Cardozo, J.)). This issue of privacy, if that it be deemed, was and is determined by the Evans case and the Hunter case, decided simultaneously with this.

The executive power of the State, vested in the Governor, is broad (see N.Y.Const., art. IV, §§ 1, 3; Executive Law, arts. 2, 3). In his capacity to oversee, even beyond his responsibility to operate, the Governor may investigate the management and affairs of any department, board, bureau, or commission of the State (Executive Law, § 6). This investigatory power, which includes the power to subpoena witnesses, as well as to require the production of books and papers, and which authorizes the Governor to delegate the investigatory function to persons appointed by him for that purpose, permits the Governor to exercise considerable vigilance, but not necessarily direction, in protecting against conflicts of interest. The Constitution and statutes thus recognize explicitly the need for and the power in the Governor to oversee, but again not necessarily to direct, the administration of the various entities in the executive branch.

The Governor may also direct the Attorney-General to inquire into matters "concerning the public peace, public safety and public justice" (Executive Law, § 63, subd.

8). Implementation of this power is illustrated by Governor Dewey's creation in 1951 of the New York State Crime Commission to investigate the relationship between organized crime and State government (see Matter of Di Brizzi (Proskauer), 303 N.Y. 206, 211-216, 101 N.E.2d 464, 466-468).

There are, however, limits to the breadth of executive power. The State Constitution provides for a distribution of powers among the three branches of government (see N.Y.Const., art. III, § 1; art. IV, § 1; art. VI). This distribution avoids excessive concentration of power in any one branch or in any one person. Where power is delegated to one person, the power is always guided and limited by standards. In fact, even the Legislature is powerless to delegate the legislative function unless it provides adequate standards (Packer Coll. Inst. v. University of State of N. Y., 298 N.Y. 184, 189, 81 N.E.2d 80, 81). Without such standards there is no government of law, but only government by men left to set their own standards, with resultant authoritarian possibilities.

Defendants cite numerous instances, reaching far back into the State's history, in which the Governor has acted by "executive order", although not usually so denominated. But, until 1950, none of those orders had any rule-making component. They were emergency measures later submitted to the Legislature for ratification, actions taken pursuant to an unchallenged constitutional or statutory power of the Governor, or proclamations without significant legal effect. (See, e. g., 3 Lincoln, Messages from the Governor, pp. 38-40 (proclamation calling Legislature into Extraordinary Session).) After 1950, there were a number of different types of orders which were seemingly cast in a rule-making mold, but were repetitive of existing legislation as to standards and implemented the enforcement of those standards by voluntary arrangements, directions for co-ordination or the interposition of mediatory bodies (see, e. g., Executive Order Establishing Code of Fair Practices, 1960 Public Papers of Governor Nelson A. Rockefeller, p. 1130; Executive Order for Resolution of Employee Complaints, 1950 Public Papers of Governor Thomas E. Dewey, p. 613). Assuming they were valid, as they undoubtedly were in large measure, the order in this case goes beyond any of them.

It is true that in this State the executive has the power to enforce legislation and is accorded great flexibility in determining the methods of enforcement (see N.Y.Const., art. IV, § 3). But he may not, as was recently said of the Mayor of the City of New York, "go beyond stated legislative policy and prescribe a remedial device not embraced by the policy" (Matter of Broidrick v. Lindsay, 39 N.Y.2d 641, 645-646, 385 N.Y.S.2d 265, 267, 350 N.E.2d 595, 597). And, as noted in the Broidrick case, decided unanimously by this court, the flexibility allowed the executive in designing an enforcement mechanism depends upon the nature of the problem to be solved (id., p. 646, 385 N.Y.S.2d p. 267, 350 N.E.2d p. 597). Where it would be practicable for the Legislature itself to set precise standards,...

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