Tm Park Ave. Associates v. Pataki

• Decision Date: 25 March 1999
• Docket Number: No. 95-CV-1480.,95-CV-1480.
• Citation: 44 F.Supp.2d 158
• Parties: TM PARK AVENUE ASSOCIATES, Plaintiff, W.E.A. Associates, Plaintiff-Intervenor, John Hancock Mutual Life Insurance Company, Plaintiff-Intervenor, v. George E. PATAKI, Individually and as Governor of the State of New York; H. Carl McCall, Individually and as the Comptroller of New York State; New York State Department of Audit and Control; State University of New York; Frederick Salerno, Individually and as Chairman of the Board of Trustees of the State University of New York; Board of Trustees of the State University of New York; Thomas A. Bartlett, Individually and as Chancellor of the State University of New York; Lonnie Clar, Individually and as Associate Counsel to the State University of New York; Irving Freedman, Individually and as Vice Chancellor of Capital Facilities of the State University of New York and General Manager of the State University Construction Fund; New York State Dormitory Authority; the State of New York, Defendants.
• Court: U.S. District Court — Northern District of New York

Page 158

44 F.Supp.2d 158

TM PARK AVENUE ASSOCIATES, Plaintiff W.E.A. Associates, Plaintiff-Intervenor John Hancock Mutual Life Insurance Company, Plaintiff-Intervenor, v. George E. PATAKI, Individually and as Governor of the State of New York; H. Carl McCall, Individually and as the Comptroller of New York State; New York State Department of Audit and Control; State University of New York; Frederick Salerno, Individually and as Chairman of the Board of Trustees of the State University of New York; Board of Trustees of the State University of New York; Thomas A. Bartlett, Individually and as Chancellor of the State University of New York; Lonnie Clar, Individually and as Associate Counsel to the State University of New York; Irving Freedman, Individually and as Vice Chancellor of Capital Facilities of the State University of New York and General Manager of the State University Construction Fund; New York State Dormitory Authority; the State of New York, Defendants.

No. 95-CV-1480.

United States District Court, N.D. New York.

March 25, 1999.

Office of Ronald H. Sinzheimer, Albany, NY (Ronald H. Sinzheimer, of Counsel) Stroock, Stroock Law Firm, New York, NY (Leonard Boxer, of Counsel), for Plaintiff TM Park Ave. Associates.

Rosenman & Colin, LLP, New York, NY (David J. Mark, of Counsel), for plaintiff-intervenor W.E.A. Associates.

Debevoise & Plimpton, New York, NY (P. Bradley O'Neill, of Counsel), for plaintiff-intervenor John Hancock Mutual Life Ins. Co.

Dennis C. Vacco, Attorney General of the State of New York, Albany, NY (Steven H. Schwartz, Asst. Atty.Gen., of Counsel), for defendants.

MEMORANDUM-DECISION & ORDER

McAVOY, Chief Judge.

I. BACKGROUND

A. Facts

This case arises from a lease dispute between plaintiffs and defendant-lessee the State University of New York ("SUNY"). The facts are well-known and addressed in TM Park Ave. Assocs. v. Pataki, 986 F.Supp. 96 (N.D.N.Y.1997), familiarity with which is assumed.

In brief, in April 1986, plaintiff TM Park Avenue Associates ("TM Park") leased space at 315 Park Avenue South in New York City to SUNY's College of Optometry. The lease term ran from April 1986 to July 2004.

In 1989, SUNY began exploring options to convert the College of Optometry to public space. In late 1994 and early 1995, SUNY and the City University of New York ("CUNY") drafted and submitted a joint proposal to the Division of Budget ("DOB") for the relocation of both schools. Essentially, the proposal had CUNY consolidating its operations at new property to be purchased, and SUNY relocating to CUNY's present location.

During the 1995 Legislative Session, Chapters 312 and 313 were passed into law, which orchestrated the relocation plans. Section four of Chapter 312 provided, in relevant part, as follows:

Notwithstanding any other provision of the law, no appropriation shall be available on or after July 1, 1996, or as soon thereafter as the state university college of optometry shall complete relocation to facilities owned and financed for public purposes, for funding support for privately or commercially leased building space for the state university college of optometry operations at 100 East 24th Street/315 Park Avenue South, in New York City, to reflect the elimination of such funding support due to fiscal deficiencies and unavailability of funds.

Chapter 313, in turn, authorized the Dormitory Authority to acquire property into which CUNY would move as part of its consolidation plan.

B. Procedural History

TM Park, joined by plaintiff-intervenors John Hancock Mutual Life Insurance Company and W.E.A. Associates (collectively, the "plaintiffs"), initiated this action seeking, inter alia, a declaratory ruling that Chapter 312 of the Laws of 1995 ("Chapter 312) violates the Contract Clause of the federal Constitution. Thereafter, plaintiffs moved for summary judgment asserting that Chapter 312 of the Laws is violative of the Contract Clause because it substantially impairs TM's unexpired lease with the SUNY. Defendants opposed plaintiffs' motion and cross-moved for summary judgment in their own right. The Court granted in part and denied in part each parties' motion.

Relevant here is that part of the Court's decision which granted plaintiffs' motion for summary judgment declaring section 4 of Chapter 312 void under the Contract Clause. It is based upon that finding that plaintiffs now move for attorneys' fees pursuant to 42 U.S.C. § 1988, asserting that a violation of the Contract Clause is actionable under 42 U.S.C. § 1983. Alternatively, plaintiffs contend that they are entitled to summary judgment on their 42 U.S.C. § 1983 claims for violations of procedural and substantive due process under the Fourteenth Amendment of the federal Constitution. Defendants, in turn, oppose plaintiffs' request for attorneys' fees and cross-move for dismissal of plaintiffs' section 1983 claims based upon either the Contract Clause or the Due Process Clause.

II. DISCUSSION

A. Whether a Contract Clause Claim is Actionable Under Section 1983

Plaintiffs seek attorneys' fees and expenses pursuant to 42 U.S.C. § 1988¹ based on the Court's previous determination that Chapter 312 violated the Contract Clause of the Federal Constitution. Defendants oppose plaintiffs' fee application asserting that the Court's prior ruling on the Contract Clause does not give rise to a section 1983 claim and, therefore, plaintiffs may not recover attorneys' fees and expenses under section 1988. The question presented, therefore, is whether a section 1983 claim lies for a violation of the Contract Clause. For the reasons to follow, the Court holds that a claim alleging violation of the Contract Clause can be brought pursuant to 42 U.S.C. § 1983.

This issue was first addressed in Carter v. Greenhow, 114 U.S. 317, 5 S.Ct. 928, 29 L.Ed. 202 (1885). In Carter, the State of Virginia passed legislation in 1879 "to provide a plan of settlement of the public debt" whereby the state issued bonds and coupons. 5 S.Ct. at 929. Carter owed taxes to the state and, in satisfaction thereof, tendered coupons cut from the bonds. Pursuant to an 1882 state legislative enactment that forbade tax collectors from accepting anything other than "gold, silver, United States treasury notes, and national bank currency," the state refused to accept the coupons. Id. The state thereafter entered upon, seized, and sold Carter's property in satisfaction of the outstanding tax payments. Carter then brought an action for trespass on the case against the treasurer of the City of Richmond, Virginia. In his complaint, Carter alleged that the 1882 statutory enactment was "repugnant to the constitution of the United States, and [is] therefore void." Id. According to Carter, his rights "derive[d] from the contract with the state, contained in the act of March 28, 1879, and the bonds and coupons issued under its authority." Id. The Complaint specifically stated that "in refusing to receive said coupons and money in payment of said taxes, and in levying on and seizing plaintiff's property for said taxes ... the defendant deprived the plaintiff of a right secured to him by the constitution of the United States, under color [of law] ... to the damage of the plaintiff two hundred dollars." Id. The question before the Court was whether the federal courts had jurisdiction and, thus, whether "the facts stated in plaintiff's declaration constitute a cause of action within the terms of [section 1983]." Id. at 930; see McGahey v. State of Virginia, 135 U.S. 662, 10 S.Ct. 972, 978, 34 L.Ed. 304 (1890).

In discussing the matter, the Carter Court stated:

How and in what sense are these rights secured to him by the constitution of the United States? The answer is, by that provision, article 1, § 10, which forbids any state to pass laws impairing the obligations of contracts. That constitutional provision, so far as it can be said to confer upon or secure to any person any individual rights, does so indirectly and incidentally. It forbids passage by the states of laws such as are described. If any such are nevertheless passed by the legislature of a state, they are unconstitutional, null, and void. In any judicial proceeding necessary to vindicate his rights under a contract affected by such legislation, the individual has a right to have a judicial determination declaring the nullity of the attempt to impair its obligation. This is the only right secured to him by that clause of the constitution.... And the only mode in which that constitutional security takes effect is by judicial process to invalidate the unconstitutional legislation of the state, when it is set up against the enforcement of his rights under his contract.... Congress has provided no other remedy for the enforcement of this right.

5 S.Ct. at 930 (emphasis supplied).

While, upon initial impression, Carter seemingly holds that a claim for the violation of the Contract Clause may not be maintained under § 1983, see Dennis v. Higgins, 498 U.S. 439, 111 S.Ct. 865, 876, 112 L.Ed.2d 969 (1991) ("In our only previous case discussing a § 1983 claim brought for the violation of a supposed right secured by Article I of the Constitution, we held that violation of the Contracts Clause does not give rise to a § 1983 cause of action." (Kennedy and Rehnquist, J.J., dissenting) (citing Carter, 114 U.S. 317, 5 S.Ct. 928, 29 L.Ed. 202); Andrews v. Anne Arundel County, 931 F.Supp. 1255, 1267 (D.Md.1996), aff'd, 114 F.3d 1175, 1997 WL 321573, cert. denied, ___ U.S. ____, 118 S.Ct. 600, 139 L.Ed.2d 489 (1997), that is not so. The Supreme Court affirmed the dismissal of Carter's action upon the limited ground that Carter failed to state a claim under § 1983 because it only pleaded a breach of contract claim. Carter, 5 S.Ct. at 931; Dennis v. Higgins, 498 U.S. 439, 111 S.Ct. 865, 872 n. 9, 112 L.Ed.2d 969 (1991); Chapman v. Houston Welfare Rights Org., 441 U.S. 600, 99 S.Ct. 1905, 1914 n. 29, 60 L.Ed.2d 508 (1979...