Wein v. Comptroller

• Decision Date: 06 February 1979
• Citation: 413 N.Y.S.2d 633,386 N.E.2d 242,46 N.Y.2d 394
• Parties: , 386 N.E.2d 242 Leon E. WEIN, Appellant, v. COMPTROLLER of the State of New York et al., Respondents.
• Court: New York Court of Appeals Court of Appeals

Page 633

413 N.Y.S.2d 633

46 N.Y.2d 394, 386 N.E.2d 242

Leon E. WEIN, Appellant, v. COMPTROLLER of the State of New York et al., Respondents.

Court of Appeals of New York.

Feb. 6, 1979.

Leon Edward Wein, Brooklyn, pro se.

William J. Quirk, Brooklyn, for Leon E. Wein, appellant.

Robert Abrams, Atty. Gen. (Jean M. Coon, Albany, of counsel), for respondents.

WACHTLER, Judge.

The question on this appeal is whether a citizen taxpayer has standing to challenge the constitutionality of the issuance of State bond anticipation notes.

In December, 1976 the plaintiff, Leon Wein, commenced this action as a citizen taxpayer seeking a declaratory judgment that 74 million dollars in bond anticipation notes issued by the State in March of that year were issued in violation of the State Constitution. Specifically he claimed that the notes had been issued to finance a 1975-1976 State deficit and that this practice, characterized as "back bonding", is prohibited by sections 11 and 12 of article VII of the State Constitution. In addition to demanding a declaration that the practice is unconstitutional, the complaint requests an injunction precluding the defendants "from issuing any further back-bonding debt."

The defendants moved to dismiss on the ground, among others, that a taxpayer who, like the plaintiff, had not purchased any of the notes and is not otherwise personally aggrieved by their issuance, lacks standing to challenge the constitutionality of the procedure employed. Special Term granted the motion and dismissed the complaint holding that article 7-A of the State Finance Law denies a taxpayer standing to maintain an action with respect to the issuance of State bonds or bond anticipation notes. The Appellate Division affirmed for the reasons stated at Special Term.

On this appeal, taken as of right on the ground that a constitutional question is presented (CPLR 5601, subd. (b), par 1), the only issue involves the plaintiff's right or standing to maintain the action. The plaintiff argues that our decision in Boryszewski v. Brydges, 37 N.Y.2d 361, 372 N.Y.S.2d 623, 334 N.E.2d 579, established a broad right of standing on behalf of taxpayers to seek judicial review of governmental action which is said to be unconstitutional; that article 7-A of the State Finance Law, although enacted after Boryszewski, does not alter or abridge the right judicially created and that cases from this court, decided before the enactment of the statute (citing Wein v. City of New York, 36 N.Y.2d 610, 370 N.Y.S.2d 550, 331 N.E.2d 514) and afterwards (citing Wein v. State of New York, 39 N.Y.2d 136, 383 N.Y.S.2d 225, 347 N.E.2d 586; Wein v. Carey, 41 N.Y.2d 498, 393 N.Y.S.2d 955, 362 N.E.2d 587; New York Public Interest Research Group v. Carey, 42 N.Y.2d 527, 399 N.Y.S.2d 621, 369 N.E.2d 1155) have recognized the right of a taxpayer to challenge the issuance of bonds or anticipation notes.

In the Boryszewski case we held that a citizen and taxpayer can maintain an action "to test the constitutionality of a State statute authorizing the expenditure of State moneys" (Supra, 37 N.Y.2d at p. 363, 372 N.Y.S.2d at p. 625, 334 N.E.2d at p. 580). That determination, expanding a taxpayer's standing to sue, was not based on any constitutional right of standing. The only constitutional principle bearing on the standing issue was the doctrine of separation of powers which had previously been asserted negatively to bar taxpayers' suits. Under prior law it was held that the courts lacked the power to "interfere" with the "acts of another department of government" except to determine "the individual rights of the parties" and that a taxpayer's interest in the expenditure of State moneys was not sufficiently direct or immediate for him to be considered an aggrieved party (Schieffelin v. Komfort, 212 N.Y. 520, 530, 537, 106 N.E. 675, 677; St. Clair v. Yonkers Raceway, 13 N.Y.2d 72, 242 N.Y.S.2d 43, 192 N.E.2d 15). Thus the recognition in Boryszewski of the taxpayer's legitimate and significant interest in State expenditures did not call for the recognition of a new constitutional right of standing but rather the abandonment of an old constitutional impediment to standing in these cases (see, e. g., St. Clair v. Yonkers Raceway, supra, at p. 80, 242 N.Y.S.2d at p. 47, 192 N.E.2d at p. 18 (Fuld, J., dissenting); Boryszewski v. Brydges, supra, 37 N.Y.2d at p. 364, 372 N.Y.S.2d at p. 625, 334 N.E.2d at p. 581). ^*

The Legislature too has acknowledged that "each individual citizen and taxpayer of the state has an interest in the proper disposition of all state funds and properties" (State Finance Law, § 123). Within two months of the Boryszewski decision the Legislature added article 7-A to the State Finance Law, which also permits a citizen taxpayer to "maintain an action for equitable or declaratory relief, or both, against an officer or employee of the state who in the course of his or her duties has caused, is now causing, or is about to cause a wrongful expenditure, misappropriation, misapplication, or any other illegal or unconstitutional disbursement of state funds or state property, except that the provisions of this subdivision shall not apply to the authorization, sale, execution or delivery of a bond issue or notes issued in anticipation thereof by the state or any agency, instrumentality or subdivision thereof or by any public corporation or public benefit corporation" (State Finance Law, § 123-b, subd. 1). The statute establishes a uniform procedure (State Finance Law, § 123-c), authorizes the court to require the plaintiff to post an undertaking as security for costs (State Finance Law, § 123-d) and permits the court to reimburse the plaintiff for costs and attorney's fees if the action is successful (State Finance Law, § 123-g). The statute further provides that "(n)othing in this article shall abridge or alter rights of actions or remedies now or hereafter existing" (State Finance Law § 123-i).

Subsequent to the effective date of article 7-A (Sept. 1, 1975; see L.1975, ch. 827, § 2) Boryszewski was extended to permit a taxpayer to challenge the constitutionality of a revenue raising, as distinguished from an expenditure, measure. In Wein v. Carey, 41 N.Y.2d 498, 500, 501, 393 N.Y.S.2d 955, 956, 958, 362 N.E.2d 587, 588-589 Supra, it was held that a taxpayer had standing to contest the issuance of tax and revenue anticipation notes issued by the State. This was viewed as a logical consequence of Wein v. State of New York, 39 N.Y.2d 136, 383 N.Y.S.2d 225, 347 N.E.2d 586, Supra, an earlier taxpayer's suit, which involved a claimed unconstitutional lending of the State's credit in connection with the issuance of State tax and revenue anticipation notes. In no case however have we held that a taxpayer has standing to challenge the issuance of State bonds or bond anticipation notes. The question was raised in New York Public Interest Research Group v. Carey, 42 N.Y.2d 527, 399 N.Y.S.2d 621, 369 N.E.2d 1155, Supra, but was not reached because it was found that plaintiff's challenge to pending legislation was premature. And in Wein v. City of New York, 36 N.Y.2d 610, 621, 370 N.Y.S.2d 550, 558, 331 N.E.2d 514, 520 Supr...