Kurland Decision

8/14/2019 Kurland Decision

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SUPREME COURT OF THE STATE OF NEW YQRK - EW YORK COUNTYPRESENT: Q, E T E R , s ~ F $ ~ O , D , ,, ,

Just&PART 6 j

,"kEll'A KURLANb, JO ANNlk SIMON,MEL GAGRlN and GAH JkG6BY INDEX NO. 116075 loa

MOTION DATE DOC. 8,2008l i i n t iMMOTION SEh.NO . .001

NEW YORFINANCEI

The foilowing papers, numbergd 1 to 8 , , were read op thlq mot&

Notice of Motion/ Order10 Ghow C a w @+Atndavits -Exhibits ,..\-.

' AfiJWgrlng Affl'dqvlts +'Elrhiblts ~z Replying AfFtdavlts I d0Cross+Motion: Ci Y.es ILJ No

Upoh the f o r e p i n g paper$, #hie pla in t jp ,Order to $how Causa for adeclat'atory udgrngrtt and prel!mieary injunctivd re1 d@fwidant% ross motion todisnilss the complalnt are decided in aucordance with the accompanying decision, orderand judgment.

This constitutes the decision, order a juctgrnant of the Court.


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SUPREME COURT 01 T H E SIATEO P N E W YOlIKCOIJNTY O F NK W YOl-IK: P A R T 61

J I ainti ffs,-against-

N EW YORK C I T Y C A M P A I G NDefendants .

0.PETER SH ERWO O D, J.:

D E C I SI O N , O l W E RA N D JUDGMENTJndex No. 11607,5/21)08

______________--------------------

Ilaintills Yet ta Kurland, I o Anne Si rnon, M cl Gagarin and Dan Jacohy (plaintiffs)cornmenccd this action fo r declal-atory and iri+iunctive elief pursuant t o CPL Ii 5 300 1 an d Article63 . This case brings up ibr review Advisory Opinion 2008-7 ( AO) issued by the deicndant NewYork Ci ty Ch np aig n Finance Board (thc W B ) following the cnactineiit 011 N o v cm b er 3, 2008, of .Local Law No . 5 1 (2008) which extended t c rni limits from the currcnt tw o term s to three for currentelected officials and al lowed such orficials to r u n for their incumbent seats i n the 2009 generalelcction. T h e AC) was issued b y the CkB to addrcss the extraordinary impact of1,ocal Law N o. 5 1on prospective candid ates with rcpor led activity i n anticipation ofseeking elcction to a higher office,who will now seek rc-clection to thci r incul ther i t oflice, and to cnhancc the possibility thal suchcandidates will participate in the New York City Finance Irogram (the 1)rogrmi). The quest ionbefore this C h u r t is whethcr th e A 0 violalcs the Nc w Yoi-k City Campaigii Finance Act (the Act)(Administrativc Codc o f the City of New YC)i-k[Adi77inistrative Chcle] 9 3-70 1 ef .sq.).

Th e complaint seeks in its first caus c o f a c t i o n a declaration t h a t th e CFBs A 0 violates thcAct. In thc second cause 01 ac t ion , the plnintiffs essentially seck to cn,joiii th c CFB fromimplementing th e terms of th e A 0 h y restraining the CFB l?om exempting expcndi turcs m ade by acandidate in furtheraricc ol a campaign [or any municipal office from 2006-2008.

Thc C F B cross moves for :in ordcr pursuant tn CI)JJ< 5 8 72 15 and 32 1 1 ( 1 - 1 ) (7 ) dismissingthe complaint for hilLirc to stntc a CLILISC 01action.

T he Court has reviewed and considered the fbllowing papers: t lic Ord er to Show Cause, theaffimiation of1,co Gl ickman, I 3 q . , plaint i ffs al tumcy, dstcd Dece mber 2, 2008 , with exhibits A


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and H, the riotice of cross motion, dated Lkccmbcr 15?2008, the afficlavit o r A m y M . I,oprest,CEBs Executive Llircctnr, s wo rn to on Tleccmber. 15, 2008, with exhihi ts A through F,dcfcndants mcrnorandum of law in opposi t ion to the Order to S h o w C a u s e and in support of thecross motio n to dism iss, and plaintiffs rcply ~ n e m o r a n d u m 1 law in fiir-thcr suppor t of the Orderto Show C:iuse. llic Cour t also heard oral arguniciit on the p1aiiitiII.s application and thcdefendants cross ii iotion. Follow ing oral arguincn t, the (h u rt resc rvcd dccision. IJpon du econsideration cjfthe mo ving and cr oss m oving papers and tlie partics ar gum ents both on thc papersand orally m ad e to th e Court , the def inda nt CFBs cross rnotion to dismiss the complaint is granted,the complaint is dismissed and the plaintiffs inotion fb r declaratory and injiiiictive relief is denied.

lheAc t provides Jbr and govci-ns tlie voluntary system for caiididates running for riny offivccovered offices, iiame ly, Mayor , Com ptrollcr, Public Adv ocatc, I3orough President and City CouncilMember , to receive matching taxpaycr fi i i ids in exchange h r their agrccmcnt t o abide by rulesl imit ing fundrais ing and camp aign cxpcnciitures. IhcAct, togethcr with tlic New Y o r k City Charter,Chapter 46 (the C h i r t e r ) , ci-eatcd th e CFB a s an independcnt agency charged with administeringthe lrogram (Adm inistrative Code 8 3-708 , Char te r 5 1052). The Act and tlie Cam paign FinanccHoard Rules (tlie Rules ) promulgated by the CF B pursuant to section 3-708 of the Act and section1052 of th e Chrler , govcm each candidates e l ig ibi l i ty for publ ic hnds , thc audi t ing or eachcandidates financial activity to C I ~ S C I I - ~ompliance with the Act ant1 Rules, and disburscment o fpublic funcis. Th e prima ry pi.irpose of thc Program is to makc candidates for niuilicipal electiveoffice less dependent oii 1:ii-gc uontributiol-is an d 1.0 cnablc grassroots candidatcs to mountcompetitive campaigns. I n this regard, tlic CF13 seeks to niaxiniize participation i n the Programbecause all participating candida tes musl irdhcre to th e same spen ding limits thereby creating a niorclevcl playing iield fo r all candidates in an clection.

All participants in Ihc I-rograrii are subject to the Acts spending l imits which for purposesof th is proceeding fall in to thrcc catcgorics: the limit for the tlli-ee year s prior to the year of theelection, t h u primal-y limit arid tlic gcncral election limit. Tlic ljmit l o r City Counci l candidatcs is$43,000 lbr the thrcc calendar ycars prcccdiiig th e election for which the candidale is cei-lified a s aparticipant in thc Progi-am,whercas thc cxpciiditui-e Iiinit ror th e higher officcs ranges from $129,000to $290,00 ( SL JC ,Adiiiinistrative Code 9 3-706 12 1 ) . City CoLincil can dida tcs ar e liimifed to .R 161,000

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fo r th e priniai-y elcction, a d hc n again for the general election, whcrer-is th e expenditu re l imits fo rthc prirnary and gcricral electiori for-highcr covercd oflices range l iom 9;1,386,000 t o $6,158,000( SCP , Administrative Cotic 9 3-706 [ 1 j 131).

The extension of term limits caused by the eiiactmcrit of Local Law No. 1, created adilem ma for p;lrticip:iting C i t y Counci l iiiembcrs who had been running fo r higher office, bu t whowanted to changc coursc and ru n Ibr- thcir incumbent off ice pursuant lo Local 1,aw No. 5 1 .In the A 0 th e C:FH described the issue belorc it ;IS ollows:

A s a resu l t cof.[I,ocal I.;iwNo. 5 I ] , many candidates m i y no longerchoose to ru n in the 2009 clcctioii or rnay chaosc to run fo r adifferent ol-lice than that for which they have txen ra is ing andspend ing money . The biggcst challenge is that the Boardsrules prewinc that all contr ibut ions and spending arc for acandidates next election. At lhis late point i n the electioncycle , ;i substant ia l number o f candidates have reccivcdmany contr ibut ions at a higher limit tlim will apply if theyrun for a lowc r office. M o e i inyort an 1y , ma n ycandidates have spciit well over the total expendi turelimits fo r the lowcr otlice.

The CFR thcn proccedcd to providc candidatcs with guidaucc c)n how to rcbut thepresumptions h u n d in tlic Kules in the uniquc circum stanccs beforo it an d to pcrruit th e affectedcandidates to participate in tlic Pi-ogram for the 2009 election evcn though they may have alruadyraised oI spent mo r c tlian the cxpcndi turc liiiiit fo r the lower oft?ce. I n i ssuing the AO , the C:FHbelievcd that th c options created thercby would cnsLire the fairest and niost coinpetit ivc electionsfo r the 2009 election cycle fo r both incumbents and challenge rs alikc. The A 0 s an attempt by theCFB to make i t pi-actical h i - dl cr-indidates who wish to jo in the P rogram to c lo so . It addrcsses twogroups of cnndidatcs - - candidates who anticipated seokiiig higher ofiicc who will now seek rc-election to thcir incumben t oflice in 2009 (Grou p 1 candidates) and candidates with reported activitywho will iiow no t rein in thc 2000 elect ion, bu t will seek ofice in 20 1 3 (Group 2 candidatcs).

The CFl3 through tlic A 0 ntcrprcteci its Rulcs tu allow (.;roup 1 candidatcs to : ( 1 ) frccze theircurrcnt committee until the 2011 c lcct ion cycle a d estart with a new comnii t tce tb r the 2009election cycle; or (2 ) use tlicir ciirront co mm ittee to run for re-election to their incunibcnl oflice inthe 2009 election, return al Iover -thc -l imi t cc~n t r ibu~ io ns ,nd allocatc all cxpe ndit urcs incirrred prior


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to Noveinber 3 , 2008, betwccn tlic :iborled 2009 c:mpaign and t lw 2009 re-election campaign. I norder to take advantag e oloncof thcsc two opt ions , candidates must show that they had been seeking;Ihigher off ice .

The CFB also inierprctcd its R L I ~ ~ So a l low Ciloup 2 candidates to keep the comniittccrormcd for the 2009 c k c t i o t i cyclc and use i t instcad (ijr the 201 3 election. All expend itures incurredprior to Januaiy 12, 201 0, except those associated with fcmdraising, will not count toward the 201 3election. Costs associated with raising those Tunds wil l count towards th e spen ding l imit for th e201 3 clection with a 1 5% flat ratc assessed on thc total a mo unt of un ds in thc comriiittee on January11 ,2010 .

In both its m o v i n g p;ipers and at oral argum ent, plainti lls conirncndcd the CFB fo r attemptingto encourage as inany candidates as possible to jo in the Program, but contcndcd that its mechanismfor doing so was Fdulty. Plaintiffs claim that the A 0 suspends the poi-tions uf thc Act that areintended to lcvcl the playing lieid betwccn candidates. Accoi-ding to plaintiffk argument , the AC)is not in h a r m o n y with, hut rather is contrary to thc Act and I


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Thc C F I 3 opposes the plairitifrs ;ipplication ;und cross moves to disiniss the complaint forfailure to state a cause of action. Not surprisingly. the CFI3 avers that thc A 0 is cons istent with theAct and I


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OF the administ rat ivc agcricy and its intcrprct ivc regulat ions are t l i cid orc to be accorde d much lessweight ( ~ ~ ~ I ~ M - ~ . , o l i 4 ~ ) i ~ i ~ ~ ~J>/.s . ,nc . 1.1Ncw York Slir tc niv. c!fHozr.s. & Iommunity Renrwcil, 5NY2d 303, 3 12 [ N O S , qiioting Kttrsics v Mcrchm/ . s Mzi/. 1ri.Y. C o . , 49 N Y 2 d 45 1, 459 [ 1W O ] ) . Insuch cases, judicial review is less rcstrict ivc and the courts arc h e to ascertain the propcl-intcrpretat ion from th e statuto ry langua ge and legislat ive intent (5ei//rdmm7v Subol,9 1 NY2d s u 1 mat 625). Agency dctc miinat io ns which complctely conflict wi th the clear wording of a statutoryprovision are riot to be upheld ( ,we, Rcrri/rrn ncvrJ/o/ in icr i /C h p Si/\w, 91 N Y 2 d 98, 103 [ 19971).Stated diffcrcntly, ai i agency, howcvcr laudable i t s intcnt ions, is n o t pcrmitted t u lcgislatc byinterpreting a statutc in a i i ianner which is at vai-iancc o r inconsistent with the express 1:iiiguagc ofthe statute.

lhcAct scts lorth thc expendi ture l imi ts applicable to all candid ates w ho part icipate in theIrograni. As descr ibed above , Ihe limits vary depending ~ I Jhc office l lic candid ate is seeking. Apart icipat ing candidatc seeking the officc 01 Publ i c Advocate or Comptrollcr is sub-jcct to a ncxpenditiire liniil of $3,S50,000 in each p rimary and in cach gcnci-a1 elec tion (.see, Administrat iveCode 4 3-706 [ 1 1 [a]). The exp enditu re l imit [or nicmber o f t h e C ity Couix5l is $161,000 in eachprimary and i n cnch gcncral electioii /d . lhcAct docs i i o t indicatc which l imi t shall apply if aparticipant raises and spends f~indsor the o f l i c eof C:coiiiptrollcr anti lhcrcaftet-elects to seek electionto a City Council seat. The Ac t docs not ment ion prcsumpt ions as to spending or contribution limitsand, clearly, docs riot acidrcss every situation covered hy the presumpt ions contained in the liulcs,to wit, that cxpeiiditurcs and c ontrib utions are presumed to be for th e next clcctio n Iollowiiig suchexpcnditurc (or contribut ion. R;ithe~-,he Act is confined to set t ing such spcnding an d canti-ibutionlimits an d detailing the riiaiiiier in wliicli such campaign cxpenditurcs an d fundra i s ing eKo r t s arecalculated. Thus, it is left to thc CbH t o interprct the Acts pro vision s in n manner consistent withit s imindatc to govcrn publ ic f innncing ofcan-ipaigns and t1ic Act s pur po se to luvcl the playing field.CFB Rulc 1-08 (u) (1 ) states [a111 xpendi ture is presumed mndc for the first c lcc t io i~ in which theparticipant, limited participant or iioii-I.7articipant is ;i candidatc) Iollowing t11c day i t is madc.Similar prcsum pt ions are contained in Rules 1-04 (c) (a contribut ion is prcsumed to bc acceptedfur the first election in wh ich th e particip ant, l inii tcd part icipant, o r l ion-part icipant is a candidateh l low ing the day that it is rece ived) , and 7-03 ( c ) (lhcRoai-d will prcsunic that contributions and


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l oans are accepted , disbur scm ents are r-nade,and liabililies art: incurred by a candidate For his o r hernext election), lhcsc Rules liavc bccn applied by th e CFR repeatedly to apply th e cxpcnditurclimits contained in the Act to candidates who rnonnt campaigns f o r higher off ice and thereafter optto seek re- election to tlicir curren t office (we c . ~ . , lhc Cou rt Advis ory O pinion Nos. 1903-7 an d1997-6). In each case, th e CFB exercised its authority in interpre ting lhe provisions oithe Act byreviewing the variou s cxpcnditu rcs and contrib utions and dctcrm iniiig which should be countedagainst the contr ibut ions and expenditure liriiits for each oflice.

Indccd, plaintiffs attonicy acknowlcdgcd at oral argument that tlic A 0 m a y be consistciitwith the C F B s Rules, and cssciitially conccclcd that the c3111 actccl within its authority inestabl ishing the presum ptions set Ibrth i n Rule Nos. 1 -08(c), 1-04(c) and 7-03(c). N ot surprisingly,plaintilfhas not identificd any sp ecific lan guage in the Act that is inconsistent with the Rules.

The provisions of the Act concerning campaign expenditures are not absolute. Th c Actiillows for thc iriiplcniciitiiig regulations and iiitcrprctivc o pinion s proniulgatcd by the CFB. lhcpresumptions conccriiing contribution s and cxpcnditurcs, and the adv isory opinions rcgarding howthcsc presumptions niay be rebutted, L l l within the category ol statutory intcrprctatinn involving aspecial knowledg e and un derstanding of the underlying operational practices 01 thc CFB and alsoentailing an cvaliiation ol the inferences to be drawn therefi-om. I t iremains therefoi-e fo r the coui tt o decide whethcr the CIDs intcrprctation o f the rclcvant provisions of thc Act arc irrational orunreasonable.

lhc Cour t liiicls that the A 0 is consistent with the Act. I t is iicithcr unreasonable orirrational. A s the (3% asserts , th e A 0 does n o t change the spending limits se t forth in the Act nordoes i t overrulc or ariicnd such statutory provisions. I


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races for those higher ofiiccs. Ifdeprived ofthc options con tained in the A O , thes c candidates wouldbe excluded from participation in the Pi-ogram and woulcl he rree to spcnd siiins far exceeding thelimits imposed on candidates who pxt icip ate in thc Program thereby dcleating the goals ofthe Act .Any benefit which a11 incuiiibent running for re-election wlio ha d previously expected to run fo rhigher ollice might receive f rom tlie opt ions ri iadc available by the A O , do not ma tch the negativee f l i c t sof having th c incu mb ent run foi- re-election with no limit whatsoev er o n his or hcr campaignexpenditures. Rccliiced to its simplest tcriiis, thc provisions 01 11ic A 0 effectuate the goals aridpur-poses of th e Act, naiiiely, to ensiirc competitive elections. 1.0 hold otlici-wise would be t oeviscerate the powers tlie Act granted t o the CFI3 to adiii inistzr the Program. Advisoiy Opinion2007-8 an d its interpretation of the Ac t c f f c t u a t c th c purposes of the Act . Th e record docs n o tsupport dcfcndants cla im that the CFB through the A 0 mpropcrly legislated by arncnding the Act.T he A 0 docs not add provisions to the Act that are n ot there. Ibtlie l- he A 0 nterprets the languageof the Act in order to giv e elTecc to purposcs 01. the Act.

(4 ve n th e cc)ur t s determinat ion, so 111 ICh o1 p ai n ffs action ;is st:eks i t i junc ve re ie1 m aybe sui-nmarily clenied b ec au se it is clear that plaintiffs will be unable to mcct the requisite tripartitetest for the grant of prelimin ary injunctivc relid: Th e clerricnts which mus t be dcmonstrated to beentitled to a preliminary iiijunction arc well settled, namc ly ( 1 ) a likelihood of success on the merits;(2 ) irreparable iii-jury abscnt thc granting o f tlic prclii t i inxy injunctioii; and (3) B balancing ofequities in the movants f l ivor . C P P e . ~ .loc vAxt!lroL/,73 N Y 2 d 748 [1988l) .A s notcd, the A 0 w asa proper exercise of the CFBs irirlhority to interpret the Act. Thc refo re, plaintiffs have no tdcmonstratcd a likelihood of success on the meri ts o f their claiins. Furthermore, the A 0 docs notplace challengers a ( a disadvan tage ;is comp ared wi tli incum bents, but rather preserves the purposcolthe Act to lcvcl the playing licld in clectioris for the dcsigl-iated mu nicip al of fices . Thus, i t maynot be said that any of th e plaintiffs will suffer irreparable injury absent the injunctive relie1 theyseek. I,astly, the erluitics balance in favor of the defei~dan t n that the A 0 is a reasoriablcinterpretation of thc Act and a rational I-csponse o the unique situation ci-catcd by Local La w N o.S I .

Accordingly, i t isOR D E R E D , that the plaintifrs motion b y Order to Show C.husc for n declarcltoryjudgment

an d 21 preliminary iiijunction is dcnicd; and i t is rurtlier8


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ORDEHEI) , t h a t tlic d c k n d a n t s cross molion pursuant to CP1.R 4 321 1 (a ) (7 ) to dismissth e action for failure to state a cause ofaction is granted and thc compla in t is hereby dismissed withcosts an d disbursements as taxcd by the Clerk of th c Court ; and i t is further

OIIUERED, that the Clerk is clil-cctcd t u enter judgm ent accordingly.This coiistitutcs the decision, order iind judgiiicnt ofthe courl.

DATED: Jaiiuary 5 , 2 0 0 9 12 N I E R,

.I . s.c:.

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Kurland Decision