Starburst Realty Corp. v. City of New York
| Decision Date | 18 December 1985 |
| Citation | 498 N.Y.S.2d 673,131 Misc.2d 177 |
| Parties | STARBURST REALTY CORP., Plaintiff, v. CITY OF NEW YORK, Mayor Edward I. Koch, Harrison Goldin, Carol Bellamy, Andrew Stein, Donald R. Manes, Howard Golden, Stanley Simon, Anthony R. Gaeta, Members of the Board of Estimate of the City of New York, Morris Tarshis, Director of the Bureau of Franchises, American Cablevision of Queens, Inc., Warner-Amex Cable Communications Company of Queens, and Queens Inner Unity Cable Systems, Defendants. |
| Court | New York Supreme Court |
Frederick A.O. Schwarz, Corp. Counsel by Asst. Corp. Counsels Stephen P. Kramer and Kathryn Ward, New York City, for municipal defendants.
Paul, Weiss, Rifkind, Wharton & Garrison (Mark Belnick, of counsel), New York City, for defendant Warner-Amex Communication Co. of Queens, Inc.
Cravath Swaine & Moore (Robert Joffe, of counsel), New York City, for defendant American Cablevision of Queens Inc.
Robert L. Beerman, New York City, for plaintiff Starburst Realty.
This motion to dismiss opens yet another chapter in the seemingly endless saga of New York City's attempt to bring cable television to the Borough of Queens. Once again the principal parties involved in Orth-O-Vision v. City of New York, 101 Misc.2d 987, 422 N.Y.S.2d 781 (Sup.Ct.N.Y.County, 1979) are before this court. Mr. Alfred Simon, the Vice President of Starburst Realty, is also the principal of Orth-O-Vision, Inc. And once again the court must decide serious and novel issues of law: whether local Community Boards and the public at large were adequately involved in the award of cable television contracts and the role of the New York State Commission on Cable Television in determining such issues.
First, however, a brief review of the Orth-O-Vision decision, along with the subsequent history of the franchising process for cable television in Queens, is necessary.
Like the case at bar, Orth-O-Vision v. City of New York, supra, was a taxpayer action maintained under section 51 of the General Municipal Law. Plaintiff there alleged that a franchise contract between the City and Knickerbocker Communications Corporation for a cable television system in Queens was illegal due to noncompliance with certain provisions of the City Charter. Specifically, section 368(a) of the City Charter requires a public hearing before the Board of Estimate on a petition for franchise and section 371 mandates a further public hearing before the Board on the proposed final contract. Sections 366-a(b) and 197-c, the Uniform Land Use Review Procedure (ULURP), Charter amendments adopted by referendum in 1975, provide that any proposal respecting the use of real property subject to City regulation shall be reviewed by the Community Boards of the districts in which the land use will occur and that County's Borough Board.
In a thorough opinion by my respected colleague, Justice Bentley Kassal, the Orth-O-Vision court held that the alleged illegalities in the Knickerbocker agreement were the proper subject of a taxpayer's action under the General Municipal Law. The court also found that a cable television franchise involved the use of real property subject to the City's control thus necessitating local Community Board review under ULURP. Knickerbocker's proposed franchise had not been subjected to ULURP review. The court further found that certain terms of the franchise contract with Knickerbocker, as ratified, differed in a material and substantial way from the terms set forth in the petition for franchise which was the subject of the public hearing before the Board of Estimate pursuant to section 368(a). The court therefore held that the plaintiff had demonstrated a clear likelihood that it would succeed in showing at trial that the contract was illegal and granted the application for a preliminary injunction barring construction on a Queens cable system by Knickerbocker.
Following the injunction, steps were taken to correct the defective proceedings and an accelerated ULURP process began. Cable television for Queens seemed close at hand. But while the Community Board hearings took place, the City, pursuant to a provision in the injunction order which was consented to by Knickerbocker, changed course and began accepting new proposals for the Queens franchise. On March 24, 1980, the Board of Estimate approved a new "Request for Proposals" (RFP) which set down the minimum standards the City expected for the Queens system. Proposals were received from, among others, Warner-Amex Cable Communications Company of Queens and American CableVision of Queens, defendants in the present action (hereinafter cable defendants) and Queens Inner Unity Cable Corporation, the third cable company named in plaintiff's complaint. Queens Inner Unity did not join in the motion presently before this court.
The cable defendants' proposals were reviewed by the Community and Borough Boards pursuant to ULURP in late 1980 and early 1981 and the Board of Estimate held the public hearing mandated by Charter section 368(a). Then, in April 1981, the Board of Estimate issued a Supplemental Information Request (SIR) revising the standards set down in the 1980 RFP. The various applicants, including cable defendants, responded with new proposals by July 1, 1981. Further public hearings were held before the Board and its Cable Working Group Committee but no more ULURP hearings took place before the Community Boards. The three defendants named in this suit were targeted for further negotiation in December 1981. The Board held a public hearing on the proposed contracts on June 21, 1983, and the Mayor approved the adopted agreements and executed the franchise contracts for Queens on July 19, 1983.
The contracts were then reviewed by the New York State Commission on Cable Television as required by section 821 of the Executive Law. The Commission held a public hearing of its own on August 30, 1983, and issued certificates of confirmation on December 16, 1983.
To date, the Borough of Queens is still without cable television.
On May 9, 1984, plaintiff Starburst Realty commenced this taxpayer's action pursuant to section 51 of the General Municipal Law seeking a declaration that the franchise agreements entered into between the City of New York and cable defendants are illegal, null and void and further seeking to enjoin defendants from constructing any cable television systems. Plaintiff's supplemental complaint sets forth what this court will treat as seven distinct "causes of action", although the complaint does not refer to them as such. Two allege that substantial and material differences between the Requests for Proposals and the final contracts, and between the Supplemental Information Requests and the final contracts, render the contracts invalid. One alleges fraud on the part of the cable defendants and various City officials. Two allege non-compliance with the franchise procedure provisions of the City Charter, section 368(a) and the ULURP. Two allege that the final contracts were improperly amended.
Defendants now move under CPLR 3211(a)(7) to dismiss the complaint for failure to state a cause of action or in the alternative for summary judgment under CPLR 3212. The motion is addressed to the entire complaint and sets out two basic arguments.
Defendants' threshold contention is that plaintiff lacks standing to sue under section 51 of the General Municipal Law. Section 51 allows actions "to prevent any illegal official act * * * or to prevent waste or injury to * * * any property, funds or estate of * * * municipal corporation." Defendants argue that plaintiff does not complain of an "illegal official act" or official "waste" within the meaning of the statute. I find, however, that plaintiff's allegations raise more than a simple disagreement with public officials on a matter of public policy (cf. Talcott v. City of Buffalo, 125 N.Y. 280, 26 N.E. 263 ). Aside from fraud, plaintiff alleges fundamental illegalities in the contracts and that these illegalities would result in a detriment to the City through a waste of its funds and/or imminent and possible irreparable public injury (Altschul v. Ludwig, 216 N.Y. 459 111 N.E. 216 Kaskel v. Impellitteri, 306 N.Y. 73, 115 N.E.2d 659 ). Also confronted with this issue, the Orth-O-Vision court, supra, 101 Misc.2d at 991, 422 N.Y.S.2d 781, concluded:
The franchise and contract here, if illegal, would permit the opening and use of city streets without proper authority, and, as such would constitute a trespass to city property and a public nuisance which may be prevented by a taxpayer's action. (Blanshard v City of New York, 262 NY 5, 10-11 )
The holding of Mesivta v. City of New York, 58 N.Y.2d 1014, 462 N.Y.S.2d 433, 448 N.E.2d 1344 (1983), relied upon by defendants, is not to the contrary. There the New York City Board of Education failed to specify in detail, as required by statute, its reason for reacquiring and remodeling a former school building and the cost thereof. The court held that "failure to observe these statutory provisions does not constitute the fraud or illegality necessary to support a taxpayer action pursuant to section 51." Id., at 1016, 462 N.Y.S.2d 433, 448 N.E.2d 1344; see Kaskel v. Impellitteri, supra, 306 N.Y. at 79, 115 N.E.2d 659. Plaintiff here, however, alleges a significantly higher level of illegality and waste, all within the contemplation of the statute. See Altchul v. Ludwig, supra.
I therefore hold that plaintiff does have standing to sue as a taxpayer pursuant to section 51 of the General Municipal Law and has adequately alleged the elements of such an action.
The heart of defendants' motion is their contention that plaintiff's suit presents questions over which the New York State Commission on Cable Television (hereinafter Commission) had exclusive jurisdiction and that therefore plaintiff's sole judicial remedy would have been a...
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Starburst Realty Corp. v. City of New York
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