Watkins v. New York State Ethics Com'n

• Decision Date: 21 March 1990
• Parties: Edward G. WATKINS, Plaintiff, v. NEW YORK STATE ETHICS COMMISSION, Defendant.
• Court: New York Supreme Court

Page 955

554 N.Y.S.2d 955

147 Misc.2d 350

Edward G. WATKINS, Plaintiff, v. NEW YORK STATE ETHICS COMMISSION, Defendant.

Supreme Court, Albany County Motion Term.

March 21, 1990.

Maynard, O'Connor & Smith, Albany, for plaintiff.

Robert Abrams, Atty. Gen. (David B. Roberts, Asst. Atty. Gen., of counsel), Albany, for defendant.

JOSEPH HARRIS, Justice.

In the wake of widely publicized events involving corruption of public officials in New York City and elsewhere, the Legislature, in an effort to restore public trust and confidence in their government and the civil servants employed thereby, enacted the Ethics in Government Act (L.1987, C. 813) which was signed into law on August 7, 1987.

Among other things, the Ethics in Government Act contained comprehensive financial disclosure requirements embodied in Public Officers Law, section 73-a, known as The Financial Disclosure Law. ¹

Public Officers Law, section 73-a (Financial Disclosure Law) requires certain state officers and employees to file with the New York State Ethics Commission an "Annual Statement of Financial Disclosure" detailing, inter alia, their business and social affiliations, sources of income, financial investments, and financial liabilities. Upon receipt of an employee's financial disclosure statement the Ethics Commission is entrusted with the obligation of reviewing same with an eye towards ascertaining compliance with the Financial Disclosure Law, and whether or not the employee has violated the State Ethics Law. N.Y.Exec.Law, sec. 94(10) [McKinney's]. The Ethics Commission is required to make the Financial Disclosure Statements filed with the Commission available for public inspection. N.Y.Exec.Law, sec. 94(17) [McKinney's].

A wilful failure to file, or a filing of a false statement of financial disclosure, is punishable by a civil penalty of up to $10,000. In lieu of the imposition of civil penalties, violations may be subject to criminal prosecution for a Class A Misdemeanor. Additionally, administrative disciplinary action may be taken against violators by the appointing authority as otherwise provided by law. N.Y.Pub.Off.Law. sec. 73-a(4).

Plaintiff is a Senior Attorney with the New York State Department of Social Services, earning in excess of $30,000 annually and has further been designated by his employing Department as a policy-maker. ² Accordingly, petitioner was required to file a financial disclosure statement with the Ethics Commission on or before May 15, 1989. ³

On April 4, 1989, plaintiff filed an application, pursuant to Executive Law, sec. 94(9)(k), for a total exemption from the filing requirements of section 73-a of the Public Officers Law. On or about May 1, 1989, plaintiff's application for an exemption was rejected. Due to petitioner's designation as a "policy maker", by his appointing agency, petitioner was ineligible to apply for a complete exemption from filing. (See N.Y.Pub.Off.Law, sec. 94(9)(k) [McKinney's]. In this regard, Section 94(9)(k) of the Executive Law excludes policy makers from those entitled to apply for such an exemption. Only employees or officers who must file solely by reason of salary, are eligible to apply for such an exemption from filing. (See footnote 5)

Plaintiff commenced the instant action for a declaratory judgment, seeking a declaration that all or some of the provisions of New York State Public Officers Law, section 73-a (Financial Disclosure Law) are unconstitutional and violative of both the United States and New York State constitutions, and an order permanently enjoining defendant from enforcing same. Initially plaintiff moved for a preliminary injunction barring enforcement of section 73-a of the Public Officers Law pending resolution of the action. Defendant cross-moved for dismissal of the Complaint pursuant to CPLR 3211, and for summary judgment pursuant to CPLR 3212. ⁴

Plaintiff contends that the public disclosure aspect of the Ethics in Government Act--Public Officers Law, sec. 73-a is, on its face, violative of a myriad constitutional proscriptions, including, inter alia, those embodied in the First, Fourth, Fifth and Fourteenth Amendments of the United States Constitution and their counterparts in the New York Constitution, including freedom of association, protection from unlawful searches and seizures, equal protection of the laws, due process, and the privilege against self-incrimination.

THE LAW

Plaintiff's substantive claims regarding the constitutionality of the Financial Disclosure Law, must be weighed against the police power of the State. It is a basic fundamental rule that there is a presumption in favor of the constitutionality of a legislative enactment, and every intendment is in favor of a statute's validity. A heavy burden of demonstrating unconstitutionality beyond a reasonable doubt rests upon the one who claims it. Wein v. Beame, 43 N.Y.2d 326, 331, 401 N.Y.S.2d 458, 372 N.E.2d 300; Hotel Dorset Co. v. Trust for Cultural Resources of New York, 46 N.Y.2d 358, 413 N.Y.S.2d 357, 385 N.E.2d 1284. Moreover, there is a further presumption, long recognized by the Court of Appeals, that the Legislature has investigated and found facts necessary to support the legislation as well as the existence of a situation showing or indicating its need or desirability. Id. at 370, 413 N.Y.S.2d 357, 385 N.E.2d 1284. It is within the context of these general principles governing the analysis of constitutional challenges to legislative enactments, that the Court considers plaintiff's constitutional attack on New York's Financial Disclosure Law (Public Officers Law, sec. 73-a).

RIGHT TO PRIVACY

Plaintiff initially contends that the Financial Disclosure Law is an unconstitutional invasion of privacy. Recent cases decided by both the United States Supreme Court and the New York State Court of Appeals have given recognition to a right of privacy emanating from the Fourteenth Amendment of the United States Constitution. In Whalen v. Roe, 429 U.S. 589, 599, 97 S.Ct. 869, 51 L.Ed.2d 64, the Supreme Court upheld a New York State statute authorizing the state to record the names and addresses of patients who had received prescriptions for certain drugs, but recognized that within the "confidentiality" branch of the right to privacy, individuals have a protective interest in "avoiding disclosure of personal matters." ⁵ Whalen v. Roe 429 U.S. 589, 599, 97 S.Ct. 869, 876, 51 L.Ed.2d 64, 73. (See also Nixon v. Administrator of General Services, 433 U.S. 425, 465, 97 S.Ct. 2777, 2801, 53 L.Ed.2d 867, 905, where the Supreme Court upheld an Act providing for the screening of former President Nixon's presidential materials to segregate official documents of public significance from personal documents to be returned to Mr. Nixon, but recognized that government officials have a legitimate expectation of privacy in personal communications; Hunter v. City of New York, 58 A.D.2d 136, 396 N.Y.S.2d 186 aff'd on opinion below, 44 N.Y.2d 708, 405 N.Y.S.2d 455, 376 N.E.2d 928, where the Court of Appeals upheld as constitutional the filing requirements of New York City's Local Law No. 1, which required, inter alia, certain City officers and employees in policy-making positions and/or who earned in excess of $25,000 annually, to file financial disclosure statements, but expressly recognized the need to give due consideration to the privacy interests of governmental employees.)

It is clear that the mere fact that plaintiff is a governmental employee does not mean he is completely devoid of constitutional protection. Nixon v. Administrator of General Services, 433 U.S. 425, 455, 97 S.Ct. 2777, 2796, 53 L.Ed.2d 867, 899; Kaplan v. Board of Education of the City School District of the City of New York, 759 F.2d 256 (2nd Cir.1985). However, it is clear also that in matters of financial disclosure, government employees and public officials, due to the significant governmental interest in ensuring the integrity and honesty of government and in fostering public confidence in same, have a diminished expectation of privacy as compared to their counterparts in private industry. Kaplan, supra.

To adequately safeguard those privacy interests implicated by public disclosure laws, the New York State Court of Appeals and the United States Court of Appeals for the Second Circuit have adopted a balancing test by which the rights and interests of government employees, as citizens, are weighed against the rights and interests of the government as employer. Evans v. Carey, 40 N.Y.2d 1008, 391 N.Y.S.2d 393, 359 N.E.2d 983; Hunter v. City of New York, 44 N.Y.2d 708, 405 N.Y.S.2d 455, 376 N.E.2d 928; Barry v. City of New York, 712 F.2d 1554; Kaplan, supra. These decisions are dispositive of plaintiff's claimed infringement of his privacy rights.

In Barry v. City of New York, the Court of Appeals for the Second Circuit upheld Local Laws, 1979, No. 48 of the City of New York, an enactment substantially similar to Public Officers Law, section 73-a, which required financial disclosure of most elected and appointed officials, candidates for city office and all civil service employees earning $30,000.00 or greater annually. In so doing the Court stated that "the statute as a whole plainly furthers a substantial, possibly even compelling, state interest", the purpose of the statute being "to deter corruption and conflicts of interest among city officers and employees, and to enhance public confidence in the integrity of its government." Barry v. City of New York, supra. In Kaplan v. Board of Education, supra, the United States Court of Appeals, Second Circuit, relying on its decision in Barry, upheld the constitutionality of a regulation of the Chancellor of the New York City Board of Education which required, inter alia, that elected members of Community School Boards file financial disclosure forms.

In Evans v. Carey, 40 N.Y.2d 1008, 391 N.Y.S.2d 393, 359 N.E.2d 983, the Court of Appeals upheld the...