Affirmation to Support Motion for Leave to Appeal
Public Court Documents
October 8, 1997

39 pages
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Case Files, Campaign to Save our Public Hospitals v. Giuliani Hardbacks. Affirmation to Support Motion for Leave to Appeal, 1997. c0208da7-6835-f011-8c4e-7c1e5267c7b6. LDF Archives, Thurgood Marshall Institute. https://ldfrecollection.org/archives/archives-search/archives-item/0699fa50-b165-422d-9ea3-ac2f342e6c2d/affirmation-to-support-motion-for-leave-to-appeal. Accessed June 13, 2025.
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SUPREME COURT OF THE STATE OF NEW YORK APPELLATE DIVISION: SECOND DEPARTMENT CAMPAIGN TO SAVE OUR PUBLIC HOSPITALS - QUEENS COALITION, an unincorporated AFFIRMATION IN association, by its member WILLIAM MALLOY, SUPPORT OF MOTION CAMPAIGN TO SAVE OUR PUBLIC HOSPITALS FOR LEAVE TO - CONEY ISLAND HOSPITAL COALITION, an APPEAL unincorporated association, by its member PHILIP R.METLING, ANNE YELLIN, and MARILYN MOSSOP, Appellate Division Case No. 97-01339 Plaintiffs-Respondents, - against - RUDOLPH W. GIULIANI, THE MAYOR OF THE CITY OF NEW YORK, NEW YORK CITY HEALTH AND HOSPITALS CORPORATION, and NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION, Defendants-Appellants. ELIZABETH DVORKIN, an attorney admitted to practice law before the Courts of this State, affirms under penalty of law: 1. I am an attorney in the office of PAUL A. CROTTY, Corporation Counsel of the City of New York, attorney for defendants in this matter. I submit this affirmation in support of defendants’ motion for leave to appeal to the Court of Appeals from the order of this Court, dated September 8, 1997 and never served with notice of entry. This Court modified an order and judgment of the Supreme Court, Queens County (Posner, J.), entered on February 5, 1997, and as modified, affirmed so much of the order as declared that the New York City Health and Hospitals Corporation ("HHC") lacks the statutory authority to enter into a 99 year sublease of Coney Island Hospital to a private hospital company. A copy of this Court’s order and opinion is annexed to this affirmation as Exhibit A. A copy of the lower Court’s judgment and opinion is annexed to this affirmation as Exhibit B. 2. This appeal concerns whether HHC has the statutory authority to adapt to changes in the field of health care delivery as it strives to make health care services available for all New Yorkers. The Court of Appeals is the appropriate body to decide whether the HHC Act requires that HHC be forever barred from making certain charges in the configuration of health care services, even if those changes would be the best way for HHC to carry out its mission. 3. In this case, HHC entered into a sublease of Coney Island Hospital to PHS- NY, a private hospital company HHC determined that the sublease was the best way to advance its purposes because the sublease will keep the hospital as a community based, acute care inpatient hospital with a broad range of services, improve the hospital’s physical plant immediately with a substantial capital outlay, give HHC funds to free HHC borrowing capacity for other HHC projects and guarantees a level of charity care at Coney Island Hospital greater than what HHC provides today. 4. In entering into the sublease, HHC relied on that portion of its governing statute that gives it the authority to "sublease . . . a health facility . . . for its corporate purposes." Unconsolidated Laws ("U.L.") § 7385[6]. HHC also relied on its understanding of its statutory purpose: to arrange for health care for all New Yorkers, without being encumbered by anachronistic bureaucratic requirements for the delivery of health care services. 5. This Court interpreted the statutory language authorizing subleasing as not permitting HHC "to turn over the operation of an entire hospital to a private entity by means of a 99-year sublease...." Slip Op. p. 4 (emphasis in original). This Court relied primarily on its understanding of the purpose of the HHC Act, which it held "was to establish one entity accountable to the public to operate the municipal hospitals for the benefit of the public." Id. This Court determined that the sublease of Coney Island Hospital would be inconsistent with this statutory purpose. 6. In its opinion this Court stated that HHC "may be correct that the sublease of CIH is the only viable means of ensuring that quality medical services are provided to the community in the future and that necessary capital improvements are made to the hospital," Slip Op. p. 5. If HHC is correct, as this Court was willing to posit, then this case presents an extremely important issue of health care for the people of this State: Does the HHC Act preclude HHC from taking the steps necessary to ensure the future availability of quality medical services for the poor and uninsured? 7. If the HHC Act freezes in place the health care delivery mechanism created in the 1960’s, then the Act may make it unreasonably difficult for HHC to effect its mission in the modern health care era. Because the field of health care delivery has changed radically since the time the HHC Act was enacted, HHC has to adapt to current conditions in order to continue to ensure the availability of health services for the poor and uninsured. HHC subleased Coney Island Hospital because it determined that the private hospital company operating in compliance with the sublease would do a better job of keeping the hospital available for poor people in need of medical care than HHC was likely to do. Under the sublease, the Coney Island Hospital save the Coney Island Hospital sublease. Yet if HHC is correct and the sublease is the best way to ensure the continuing availability of health services for the poor and uninsured in the Coney Island area, HHC and the people of New York City will suffer the loss of an outstanding arrangement because of the delay. 8. This case is also appropriate for Court of Appeals review because it presents an important question of legislative interpretation. In the past, the Court of Appeals has adhered to a plain meaning interpretation of legislation. See, e.g., Lad v. Grayly, 83 N.Y.2d 537, 545- 46 (1994). In its opinion, this Court rejected the plain meaning of the HHC Act in order to interpret the statute in light of its purpose as this Court perceived it. The Court of Appeals, as the highest court of this state, is the appropriate body to determine whether a plain language interpretation of the HHC Act is appropriate, and, if it is not, whether the legislative purpose was to allow HHC to adapt to changes in the field of health care delivery rather than freezing one administrative structure in place in perpetuity. 9. This case was decided together with Campaign to Save Our Public Hospitals- Queens Coalition v. Giuliani. A copy of this Court’s order and opinion in the Campaign appeal is annexed as Exhibit C. The City Council, plaintiffs n the case at bar, took the lead role in litigating the two cases. Yet only the Campaign case is final and therefore amenable to a motion for leave to appeal in the Court of Appeals. Accordingly, only this Court can decide whether the Council plaintiffs will have the opportunity to address these issues in the Court of Appeals. Given their importance to the people of New York City and New York State, it is respectfully requested that this Court grant the motion for leave to appeal to the Court of Appeals in this case on a certified question. WHEREFORE, it is respectfully requested that this Court certify to the Court of Appeals the question: Was the order of this Court, dated September 8, 1997, properly made? Dated: New York, New York October 8, 1997 edn __ELZABETH DVORKIN Exhibit A N CORNELIUS J. O'BRIEN J.P. A © | V AD2d «3. COURT OF THE STATE OF NEW YORK APPELLATE DIVISION : SECOND JUDICIAL DEPARTMENT 8799Z S/hu Argued - June 9, 1997 THOMAS R. SULLIVAN GLORIA GOLDSTEIN DANIEL F. LUCIANO, JJ. 97-01339 Campaign To Save Our Public Hospitals - DECISION & ORDER Queens Coalition, etc., et al., respondents, v Rudolph W. Giuliani, etc., et al., appellants. Paul A. Crotty, Corporation Counsel, New York, N.Y. (Jeffrey D. Friedlander, David Kamovsky, Daniel Turbow, and Elizabeth Dvorkin of counsel), for appellants. NAACP Legal Defense & Educational Fund, Inc., New York, N.Y. (Elaine R. Jones, Norman J. Chachkin, and Rachel D. Godsil of counsel); Kenneth Kimerling, New York, N.Y.; Barbara Olshanksy, New York, N.Y.; and Evette Soto-Maldonado, New York, N.Y. for respondents (one brief filed). New York Lawyers for the Public Interest, Inc., New York, N.Y. (Cary Lacheen, Lourdes I. Reyes, and Edward Copeland of counsel), for Commission on the Public’s Health System, amicus curiae. In an action for a judgment declaring, inter alia, that the New York City Health and Hospitals Corporation is not authorized to sublease Coney Island Hospital to a private entity, the defendants appeal from an order and judgment (one paper) of the Supreme Court, Queens County (Posner, J.), dated January 31, 1997, which denied their motion for summary judgment and granted the plaintiffs’ cross motion for summary judgment and declared (1) that the proposed sublease of Coney Island Hospital constitutes an ultra vires act on the part of the New York City Health and Hospitals Corporation, (2) that any sublease of a facility of the New York City Health and Hospitals Corporation requires the approval of both the Mayor of the City of New York and the City Council, and (3) that the subleasing of a facility of the New York City Health and Hospitals Corporation requires the application of the Uniform Land Use Review Procedures (see, New York City Charter § 197-c). September 3, 1997 Page 1. CAMPAIGN TO SAVE OUR PUBLIC HOSPITALS - QUEENS COALITION v GIULIANI ORDERED that the order and judgment is modified, on the law, by deleting the provisions thereof which declared (1) that any sublease of a facility of the New York City Health and Hospitals Corporation requires the approval of the Mayor and the City Council of the City of New York and (2) that any sublease of a facility of the New York City Health and Hospitals Corporation is subject to the Uniform Land Use Review Procedures, and substituting therefore a provision dismissing the plaintiffs’ first and second causes of actions; as so modified, the order and judgment is affirmed, without costs or disbursements (see, Council of the City of New York v Giuliani, AD2d [decided herewith]). O'BRIEN, J.P., SULLIVAN, GOLDSTEIN and LUCIANO, JJ., concur. ENTER: Martin H. Brownstein Clerk September 8, 1997 Page 2. CAMPAIGN TO SAVE OUR PUBLIC HOSPITALS - QUEENS COALITION v GIULIANI Exhibit B 616 rl MEMORANDUM SUPREME COURT, QUEENS COUNTY IA PART 5 THE COUNCIL OF THE CITY OF NEW YORK, 22 BY: POSNER. . J. PETER 'F. VALLONE, SPEAKER OF THE A COUNCIL, and ENOCH H: WILLIAMS, CHAIR Action No. 1 OF THE COUNCIL HEALTH COMMITTEE, : ; INDEX NO.: 004897/55 Plaintiffs, : DATED: January 13, 1997 - against - RUDOLPH W. GIULIANI, THE MAYOR OF THE CITY OF NEW YORK, NEW YORK CITY HEALTH AND HOSPITALS CORPORATION, and NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION, Defendants. CAMPAIGN TO SAVE OUR PUBLIC HOSPITALS ~ INDEX NO. : 10763/96 QUEENS COALITION, an unincorporated association, by its member WILLIAM pa Action No. 2 MALLOY, CAMPAIGN TO SAVE OUR PUBLIC HOSPITALS - CONEY ISLAND HOSPITAL COALITION, an unincorporated associ- ation, by its member PHILIP R. METLING, ANNE YELLIN, and MARILYN MOSSOP, Plaintiffs - against - RUDOLPH W. GIULIANI, THE MAYOR OF THE CITY OF NEW YORK, NEW YORK CITY HEALTH AND HOSPITALS CORPORATION, and NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION, Defendants. Defendants, Mayor Rudolph Giuliani {“CGiuliani”), the New 617 York City Health and Hospitals Corporation (“HCC”) and the New York City Economic Development Corporation (“NYCED”) have moved ‘for summary judgment. Plaintiffs in Action No. 1, The Council of the City ‘of New York (“Council”) and its principal leaders, and plaintiffs in Action No. 2, The Campaign to Save Our Public Hospitals, (“Campaign”) have cross-moved for summary judgment. Both Action No. 1 and Action No. 2 were combined for joint trial, without consolidation. (See Order of. thig court dated September 18, 1996.) The parties all agree that there are no issues of fact and that the legal issues are ripe for adjudicstion; though, initially, defendants had raised the issue of "ripeness" in their answer. The conflict between the Mayor of the City of New York and the Council of the City of New York is founded upon the age-old controversy between the executive and legislative branches of government. Fortunately, unlike the resolution adopted by the protagonists (Cassius and Brutus) in Shakespeare's "Julius Caesar", the authors of our State and Federal constitutions have wisely established the third branch of government as arbiter of disputes between the two. FEE ISSUES plaintiffs in both actions originally etitioned the 2 Py e RR FV AD S SE E P Y R E D R ® | ol » court for a . declaratory judgment interpreting Section 7385 (6) of McKinney's Unconsolidated Laws of 1969. This section of the Health and Roupitals Corporation Act (“HHC Act”) subjected the HHC’s power to sell or lease its health facilities to the approval of the Rczard of Estimate. When the Board of Estimate was abolished by the rew City Charteriof 198%, no specific language was included to indicate which person or entity inherited this partic 2 4) a de) O = (Dh ji if I (] < |= Oo un p e t hel exercised by the Board of Estimate. Furthermore, the New York State Legislature has failed to exercise its power to amend the statute substituting a specific officer or body to succeed the Board. {See A.88%6 ‘and BA.11048 of 1998.) Defendant Giuliani claims that the new Charter intended that he alone should exercise that power. Plaintiffs contend that the new Charter gives the power to the Council acting in conjunction with the Mayor. A second issue has arisen since November 8, 1856 when the Board of Directors of defendant HHC voted to empower the HHC's president to execute a lease with a for-profit corporation. Said lease in effect turns over the operation of Coney Island Hospital in toto to the lessee for eight (8) generations (198 yesars). As a result of this action, plaintiffs amended their complaints to include a new cause of action against HHC alleging it exceeded its statutory powers. 619 THE BACKGROUND Defendant Giuliani took office as chief executive of the City of New York in 1994. When he realized that he had inherited a budget with fiscal problems (stretching back to the 70's), he sought numerous ways to bring the City's expenses in balance with its revenue. One of his proposals was for the privatization of the City's public hospitals’ - ‘a continuous drain: on the City's resources. It is his belief that a private for-profit corporation can more efficiently run the City's hospitals. Whether the plaintiffs agree or disagree with this philosophy is not the issue. Nor is the debate over that philosophy one in which the court has any right or power to immerse itself. To explore properly the issues involved herein, it is necessary to step back and consider the history of the HHC Act, HISTORY Tha New York 8tate Constitution, Article Xvii, § 3 states: "The protection and promotion oi the health of the inhabitants of the state are ‘matters of public concern. and provision ‘therefor shall be made by the state and by such of its subdivisions and in such manner, and by such means as the legislature shall from time to time - determine." 4 620 Prior +o 1970, in compliance with this constitutional requirement, the City of New York constructed, maintained and operated hospital facilities providing care to residents of the City, including those persons who could not otherwise gfford hospital services. In 1969, the New York State Legislature enacted the Health and Hospital Corporation Act ("HHC Act"), creating the HHC and authorizing the City to transfer the municipal hospitals to HHC for the purpose of continuing to fulfill the constitutional mandates (1, 196%, ch 101s, McKinney's Uncons Laws of NY §§ 7381 et seq, the HHC Act). HHC's mission is to ensure the provision of "high quality, dignified and comprehensive" care to the ill and infirm of the City, and particularly those persons who can least afford such services (gee, McKinney's Uncons Laws of NY 5 7382). HHC was established at the behest of the City in part to permit independent financing of municipal hospital construction and improvements and to facilitate professional management of the hospital system. HHC's creation was Intended Lo overcome the "myriad of complex and often deleterious constraints" which inhibited the provision of care by the City in its own operation of the municipal health system (McKinney's Uncons Laws of NY § 7382). To effect that goal, 5 the Legislature gave HHC a number of powers designed to provide the "legal, financial and managerial" flexibility necessary to: carry out its purpose (McKinney's Uncons Laws of NY §§ 7382, 7385). It was authorized "[tlo make and execute contracts and leases and all other agreements or instruments necessary or convenient for the exercise of ‘its powers and the fulfillment Of its corporate purposes" (McKinney's Uncons Laws of NY § 738515} ). In ‘addition, HHC was granted the power "[t]lo provide health and medical services for the public directly or by agreement or lease with any person, firm or private or public corporation or association through and in the health facilities of the corporation ***." (McKinney's Uncons Laws § 7385(8]). Nevertheless, some of the powers conferred on HHC were constrained, and in some instances, subject to direct oversight and continuing control by the City.! Among these powers was the power See, (e.g... McKinney's Uncons Laws of NY § 73856(1) (a); HHC submits its program budget to the City in time for inclusion in the Mayor's executive budget and culminates in the City budget which the City Council has the sole authority to adopt; § 7286{(2)(b); the City has the right to acquire any health facility held by EHC; § 7386(7); HHC must exercise its powers in accordance with policies and plans determined by the City; § 7390(5)-(8); HHC employee grievances are governed by NYC Administrative Code; § 7385(19); HHC may use City agents, employees and facilities 6 622 relevant to the issues herein: K C "To . dispose of by sale, lease o dof sublease, real *** property including but not limited to a health facility, or any interest therein for ‘its corporate purposes, provided, however, that n health facility or other real propert acquired or constructed by th corporation shall be sold, leased or otherwise transferred by the corporation without public hearing by the corporat after twenty days notice and without the consent of the board of estimate of the City.” (McKinney's Uncons Laws § 7385[6]). (Emphasis added). On July 1, 1970, in accordance with the HHC Act and with the approval and authorization of the Board of Estimate, the City, by Mayor Lindsay, and HHC entered into an agreement under which HHC agreed to assume responsibility for maintaining and operating the City's public hospitals. Eleven hospitals, included under that agreement, have continued in operation since 1970. in 1934, the City, through the Mayor's office, began exploring the possibility of transferring the operation of three of those hospitals, Coney Island Hospital (“CIH”), Elmhurst Hospital Center and Queens Hospital Center (“the Queens Health Network”) to private entities. J.P. Morgan Securities, Inc., was retained by subject to collective bargaining agreements and the Mayor's consent. ie Be iii ahaa ¢ Loo Dt hea chibi TT RA Sra A Le Rr 1} 623 defendant EDC as financial advisor to prepare offering memoranda for proposals to privatize the operations of the three hospitals and to sublease their facilities. In spring of this year, HHC began receiving proposals, and on June 26, 1996, Peter J. Powers, First Deputy Mayor of the City, Dr. Luis R. Marcos, as President OF HEC, and Steven Volla, as Chairman of PHS New York Inc. ("PHS-NY") and of Primary Health Systemg, Inc. ("Primary") executed a letter of intent calling for negotiations to achieve a long-term sublease of property, plant and equipment of CIH to PHS-NY, and a contract for PHES-NY to Operate CIH as a community based, acute care in-patient hospital during the term of the sublease. On October 8, 1996, HHC and the New York City Department of Health held a public hearing on the proposed sublease of CIH. On November 8, 1996, the HHC Board of Directors authorized and approved the sublease of CIH to PHS-NY for an initial term of 99 years (and renewable by PHS-NY for an additional 99 year term). The sublease is rather unusual in that it recites those service obligations being imposed upon PHS-NY, including that PHS-NY take over HEC's operation of the hospital services and provide access to health care to indigent persons, in addition to the more typical tenant obligations. Both plaintiffs claim that (1) any sale, transfer, leave 8 z a l [J 24 ‘» or sublease of any HHC facilities to private lessees requires the -~ the Council pursuant to Unconsolidated Laws § 73851(6) ; approval of (2) any such disposition requires the application of and compliance (*"ULURP") procsss of | with the Uniform Land Use Review Procedure sections 197-c and 157-4 of the New York City Charter. The Coslirion plaintiffs also originally claimed that defendants violated section 17-b of the Charter by failing to submit their plans for privatizing the hospitals to the New York City Planning Commission and affected community boards and borough presidents. 41,.:1996, all parties stipulzted, on the i and 2 add December to permit plaintiffs in Actions No, On record in open court, to amend their respective complaints to add a cause of action against HHC asking the court to void HHC's action on November 8, 1996 as an ultra vires act. Defendants served a second amended answer to each second and asserting allegations denying various failure to state a cause of complaint of amended and 7385 (8) affirmative defenses based upon the and sections 7385(6) action and lack of ripeness, based upon affirmative irmative 1 the Unconsolidated Laws. outset, the At the failure to state a cause of action are stricken S defense based upon the failure to state a cause of action cannot be 625 interposed in an answer, but must be raised by a motion to dismiss pursuant to CPLR 3211 (a) (7) (see, Propoco. Inc. v Birnbaum, i157 an24 774,175). puis ine (D 0 0) a 0) CY ffirmative defense based upon lack of ripen [) also be stricken. At the time of the commencement of the action, the HHC Board of Directors had not yet. considered the proposed sublease of CIH, and an argument could have been made that the suits were premature. Nevertheless, at this juncture, where the HHC board has acted to approve the sublease, the issues raised by the Council and Campaign plaintiffs are ripe for adjudication. This issue will be dealt with after consideration of the issue of the devolvement of the powers of the Board of Estimate (HHC Act 7385]6]). THE BOARD OF ESTIMATE ISSUE The HHC Act expressly provides that the HHC may "dispose of by sale, lease or sublease, real or personal property, including but not limited to a health facility, or any interest therein for its corporate purposes" (emphasis supplied) (McKinney's Uncons Laws § 7385[6]). Such provision goes on to condition the exercise of that power upon the consent of the Board of Estimate of the City 10 $ 626 » (emphasis added) .2 At the time of the Passage of the HHC Act, the Board of Estimate consisted of eight elected members; the Mayor, the City Comptroller, the President of the City Council and the five Borough Hh Presidents. Each of the citywide officers had two votes and each the borough presidents had one vote. This voting distribution O 1 of the Board of Estimate members was declared viol IY i 3 = < (D O H h rr 5 MD constitutional requirement of one Person, one vote (see, Morris v Board of Esrimate, 553 F Supp 1462 [E.D.N.Y. 1984], affd 831i F224 384, affd 489 US s88 [1982]. As a consequence of such ruling, and the United States District Court order that a Plan be developed by the City to cure the constitutional deficiency (see, Morris v Board of Fatiwmate. 647 F Supp 1463), the New York City Charter Revision Commission was formed, with one of its objectives for Charter revision being to build greater participation in policy debates and decisions (see, Final Report of the New York City Charter Revision Commission - 2 The authority of the Board to approve or consent to terms of leases of sales transactions was also recognized by the State Legislature in other States laws, e.g., Urban Development Corporation Act § 3(4), codified at Uncons Laws § 6253 (1); Not- for-Profit Corporation Law 8 1411; Racing, Pari-Mutuel Wagering & Breeding Law §8§ 607(1), (3). 11 = 627 January 1989-November 1989 p LY Following the enactment on November 7, 1989 at the general election of sweeping Charter amendments proposed by the Commission, the Board of Estimate was abolished and its power distributed elsewhere. Notwithstanding the abolition of the Board of Estimate, the books" (McKinney's Uncons Laws § 7385[b]) and the Legislature ah not taken the opportunity to amend it. However, the failure of the Legislature to amend the section does not mandate a Conelision that ‘it prefers. a statutory construction severing the consent portion as obsolete. In fact, the contrary 4s true, The : Legislature, by not having acted £0 eliminate the "board of estimate" language, can be said to have opted to allow the consent power to devolve upon the body, agency or officer designated in the revised Charter to succeed to the powers of the Board of Estimate. The Charter itself contemplates this result. Section 1152(e), adopted by the voters in 13982, as part of the Charter revisions, in relevant part, provides: "the powers and responsibilities of the board of estimate, set forth in any state Or local law, that are not otherwise devolved by the terms of such law, upon another body agency or officer 12 % 628 a» shall devolve upon the bodv., agencv or Officer of rhe citv charged wich comparable and related vowers and respongibiliries under this charter, consistent with the purposes and intent Of this charter... .¥ (Emphasis supplied.) By applying such "savings" provision to the HEC Act, the original intent of the Legislature (to allow a check on EHC's power to lease or transfer a health facility or real property) may be accomplished (see, McKinnev's Statutes §§ 391-392, § 357; see glso, Matter of New York Pub. Interest Research Group Vv Dinkins, 83 NY2d4 377, 386; Matter of Natural Resources Council v New York Citv Depot. of Sanitation, 83:NY2d 215, 222, Ball v Srate of New Vorlk, 41 Nv2d 617, 622)... Moreover, none of the parties involved herein claim that no consent by a city agency, body or officer is required. This court concludes that section 7385(6) must be construed to continue to require consent; the question to be resolved is which body, agency or officer, or combination thereof, has succeeded to the Board of Estimate in this regard. The Council plaintiffs urge that the consent power granted the Board of Estimate in § 7385(6) has devolved upon both the Council and the Mayor. They point to the fact that the powers to consider land use effects and business terms have been split - under the Charter revisions between the Council, under section 197- 33 fad ER FH A er 28 629 c of the Charter (“ULURP”), and the Mayor, under § 38¢(a) of the Charter, respectively (see, Tribeca Community Assn. Inc. v New York State Urban Dev. Corp., Supreme Court, Queens County, Index No. 20385/%2, gffd 200 AD2E 536, appeal dismissed 83 NY24 905, lv to appeal denied 84 NY2d 805). They also contend that rnieicher the HHC Act nor the Charter restricts the Council to ULURP considerations only. Defendants argue that because at the time of the HHC Act's enactment, the Board of Estimate had the right to consider cr business terms under the then Charter § 384 (a) and ULURP did no yet exist, the Legislature intended that the Board of Estimate be relegated to consideration of the business terms only of any sale or lease of property held by HHC. According to defendants, such consideration of business terms has been assigned to the Mayor exclusively pursuant to § 384 of the Charter, and the Council has no role in the consent power of § 7385(6). The HHC Act, however, did not provide guidelines or limits on the type of issues the Board of Estimate could take into consideration when exercising the consent power. By its silence, the Act granted the Board of Estimate full authority to contemplate at least those issues usually associated with property disposition, including business terms and land use effects. 14 * 630 a Defendants further argue that the Council has no land use review role under the consent power of § 7385(6) because ULURP, * as the mechanism for the Council's exercise of land use review is inapplicable to HHC. According to defendants, the HHC Act supersedes any Charter provision regulating its power to subleases [O N w 1 0 citing Wavbro v New York Citv Board of Estimate, 67 NY2 Waybro, however, is distinguishable from this case, because unlike the statute at issue therein (the Urban Development Corporation Act [L. 1968, ch 174, as amended], McKinney's Uncons Law § 6251), nothing in the HHC Act indicates HHC has the authority Lo override requirements of the local charter in relation to disposition of health facilities or property (see, Wavbro v New York City Board of Fstimate, supra at 355; gee 8180, Connor vy Cuomo, 161 Misc 2d 889, 896). The HHC Act, by requiring consent of the Board of Estimate under § 7385(6) for dispositions of Property, expresses, if anything, the contrary intent. Similarly, if this court was to adopt defendants reasoning, then it would have to hold that the HHC Act supersedes even § 384 (a), the Charter provision granting the Mayor the power to review business terms of dispositions of City property. To the extent the parties agree on anything, they agree that this section gives the Mayor the power to review business terms of dispositions of City property, 5 631 including the HHC sublease. Section 384 (a) of the Charter provides: "No real property of the city may be sold, leased, exchanged or otherwise disposed of except with the approval of the mayor and as mav be provided bv lzw unless such power is expressly vested by law in another aagcencv." The sec CT | O in 1 IW rs wn 9! [\} ] \Q 0) 0 I< Li or H . \Q = y (DO = 0) 0) R ga ry 1) 4} "es "0 3 lo) bY [A} ] = 3) 0 = D | however, includes the conjunctive "and," followed by as may be provided by law unless such power is expressly vested by law in another agency." The phrase "as may be provided by law" can be read without strain or force to include ULURP wherein the power to review sales, leases and other dispositions of real property of the City is bestowed upon the Council (see, New York City Charter 88 197-c, 187-4). ULURP was enacted in 1975, "in response to.a perceived need for informed local community involvement in land use planning, for adequate technical and professional review of land use decisions: and for final decision making by e ‘politically accountable body, the City's Board of Estimate." (2 Morris, New York Practice Guide, Real Estate § 20.04, p 20-47.) In its final report, the Charter Revision Commission indicated that prior to the 1989 revision of the Charter, the Board of Estimate had "final 16 ® 633 » authority over land use decisions ***" and the Council "had no role in the land use review process" (Final Report of the New York City Charter Revision Commission - January 1989 -November 1282, Pp 7 and 12 respectively). It noted that "(tlhe basic change made by the 1989 charter amendments was to substitute the Council for the Board as the final decision maker in land use,” and that "because racizi and language minority groups will enjoy greater representation on the Council than they have had on the Board, they will be able to exert more influence if there is conflict with the mayor on a land use matter" (The Final Report, pp 20-21). ULURP, as revised, in pertinent part, provides: "$ 197-c. Uniform land use review procedure. ‘a. Except as otherwise provided in this charter, applications by any person or agency for changes, approvals, contracts, consents, permits or authorization thereof, respecting the use, development or improvement of real Property subject to city regulation shall be reviewed pursuant to a uniform review procedure in the following Categories *** (10) Sale, leage (other than. the lease of office space), exchange, or other disposition of the real property of the city." (Emphasis supplied) . HHC has been held not to be an "agency" of the City (see, Bremnan. wv City of New York, 859. Wy2d 79%, 7%2). 2nd the term "person" is not specifically defined in § 197-c, or in the New York 17 633 City Administrative Code concerning land use topics. Nevertheless, § 197-c of the Charter should be liberally construed (see, Maudlin v New York Citv Transit Auth. 64 AD24 1148, 177), and thus, HHC as a public benefit corporation, may be considered z "person" for the purposes of ULURP (see, General Construction Law §§ 37, 65). As for the meaning of “disposition,” the term is not defined by statute, charter or code provision. This court must interpret the word. The word has been defined as "the act of disposing, transferring to the care or possession of another. The parting with, or alienation of, or giving up property." {Black's Law Dictionary 471 [6th ed. 1990]). By applying this definition, the court finds the sublease of CIH constitutes a "disposition" under ULURP because it is a transfer of a real property interest, as well as service duties from HHC to PHS-NY. Defendants further argue that even assuming ULURP evinces the partial devolvement of the consent power under § 7385(6) to the Council, it cannot actually apply to the CIH sublease because ULURP violates §.104(5) of the Municipal Home Rule Law. Section 10(5) states: "xxx ga local government shall not have the power to adopt local laws which impair the powers of any other public corporation.” 18 mt dh % 634 A The Court of Appeals has interpreted § 10(5) to provide that public benefit corporations are exempt only from regulations which would interfere with their Purpose (see, Levy v Citv Comm. on Human Rights, 85 NY2d 740). Again, it is the HHC Act itself which grants a check on HHC's authority to dispose of real Property, &lbeit via the Board of Estimate, now a nonexistent body. "As explained above, the consent power of the Board of Estimate under section 7385 (6) has devolved to both the Council and the Mayor. Hence, ULURP must be viewed as not impairing the exercise of HHC's power to dispose of property by sublease. Defendants alternatively contend ULURP is inapplicable because the sublease of CIH is not the subject of any disposition by the City, but instead; 35 disposition by HHC. They argue that under traditional notions of property law, a lessee is free to exercise possession and control over the property as against ‘the world, including the landlord. According to defendants, HHC is legally allowed to sublease, and to require it to undergo ULURP review would render its leasehold less significant. Charter § 197-c, however, is not restricted to dispositions by ‘the City, but instead, is applicable to any dispositions of the real property of the City. THE ULTRA VIRES ISSUE is * J 635 The primary issue presented is whether the subleasing of CIH. =2long with ths wholesale turnover of HEC's service obligations, constitutes an ultra yires act in violation of the As Mayor Lindsay pledged to the State Legislature, in his letter to Governor Nelson A. Rockefeller, n{iin .egrsblighing =z public benefit corporation, the Citv is not getting out of the hospital business. Rather it is establishing a mechanism to aid it in better managing that business for the benefit not only of the public served by the hospitals but the entire City health service system. The municipal and health care svstem will continue to be the City's responsibility. governed by policies, determined by the City Council. the Board of Estimate, the Mavor, and the Health Services Administration on behalf of and in consultation with the citizens of New York City.” {LLetter of Mayor John 'V, Lindsay, Governor's Bill Jacket, L. 1988, ch. 1016.) The Legislature, by enacting the HHC Act chose to rely upon such pledges and created HHC, a Stile benefit corporation, to carry out the City's constitutional responsibilities. HHC, by contracting with PHS-NY by means of a 99 year sublease, to have PHS-NY take over the operation of CIH, is .shirking its own statutorily imposed responsibility, without the 290 * ¢ Legislature's approval. Although the HHC Act concededly allows for provision of health and medical services "by agreement or lease with any person firm or Private or public corporation or association, through and in the health facilities of [HHC fu 3 , cr Oo make rules and regulations governing admissions and health ang medical services" (McKinney's Uncons Laws § 73881({81), ‘such allowance may not be construed to permit the incongruous result its responsibilities to a Hh that HHC hin delegate or shift all o non-public entity as ‘a means of "furthering its corporate purposes." (McKinney's Uncons Law § 7385(8]). Moreover, that reading would frustrate the purposes and obligations of the HHC to the people of the City (see, Matter of New York Public Interest Regearch Group, 83 Ny24 377, [City officials cannot frustrate a legislative purposes by eviscerating an agency or group created by statute for a public purpose]; Matter of Gallagher v Regan, 42 NY2d 230, 234 ["(a) legislative act of equal dignity and import™ is required to modify a statute, and "nothing less than another Statute will ‘suffice®}). This situation is inherently different from one in which a particular hospital property is no longer needed, usable or affordable, requiring its closure by HHC (ses, Matter of Creenpoint Renaissance Enterprise Corp. Vv Citv of New York, 1137 21 637 AD2d 597; Jackson v New York Citv Health & Hosp. Corp., 419 F Supp 809; see 3lgs, Brvan.v Koch 827 F224 612, affg 292 TF Supp 213), Or even one in which a specific portion or service of a health facility is leased, subcontracted or merged by HHC with a view to saving costs or improving delivery of care. For in each of those eins of control and decision-making, HN instances, HHC maintains the he administration and day-to-day rr and does not leave both operation entirely to someone else. Put another way, HHC cannot put itself out of business in relation to. CIR by subleasing &ll of its assets and transferring all of its duties, without the consent of the Legislature, any more than a private corporation, by its Board of Directors, could divest itself of its assets and property without permission of its shareholders (see, Business Corporation Law § S909[a); Dukes v Davis Aircraft Prods. Co.,v13% 2D2d 720, 721). The evidence presented on these motions makes it clear that defendants seek to privatize all the HHC hospitals. It is also obvious that the "turning over" of CIH to a non-public corporation, is the first step towards defendants’ ultimate goal of disengaging the City from the municipal hospital system and placing municipal hospital services in the hands of an outsider 22 ® 638 ¢ or the private sector.? At the least, defendants seek to "downsize" HHC and minimize its role (and therefore the Qity's role), for an examination of the sublease terms reveals such limited retained control by HHC z3 to raise the question of whether HHC's continued existence could be justified if such subleasing is repeated in connection with the other HAC hospitals. For example, the sublease provides an arbitration process in the event PES-NY wishes to discontinue 2a core service, by which an arbitration award can become binding on HHC. The Legislature cannot possibly have intended or expected that by granting HHC the right to enter into agreements or leases, HHC would be put into a position where HHC's Board of Directors essentially stripped the 3 "Mayor Rudolph Giuliani recently announced plans to sell Coney Island Hospital and two other Queens hospitals into private hands. Giuliani said he was worried about rising health-care costs and deficits at city-owned hospitals, and wants to get the city out of hospital business." (Newsday, March 5, 1995, emphasis supplied). As the Mayor told the press: "Twenty years from now the mayor of New York City will not be standing here with New York City owning 11 acute-care hospitals. That will not be the case. It is going to happen, it's going to change. That change is either going to be forced on us or we're going to guide it.” (National Public Radio, Interview with Mayor Giuliani, Morning Edition, September 5, 1995.) 23 = - % . 639 corporation of its control over the carrying out of its duties. The history of the creation of HHC is instructive. HHC was borne out of the City's need to salvage a hospital System that was floundering. Tf HHC likewise is confronted with a system nearly drowning in red ink, defendants’ response cannot be simply to jump ship. They must go back to the Legislature, and seek an ee a th or > (1 ) bi i 0 od 0 i § (@) R 0, (D < - on (D 0 0 3 (D oO T =p? D 3 J 0] a d fv 00 Hh 0 H amendment or repeal oj managing the crisis. By finding that HHC has committed an ultra vires act in entering into a sublease to privatize CIH, this court is not attempting to second guess HHC or the other defendants or to substitute its own beliefs for that of the HHC Board of Directors. Instead, it is holding that EHC must give meaning to the intent Of the People as expressed through the State egislature's enactment of the HHC Act. Accordingly, the summary judgment motions by defendants In Action Nos. 1 and 2 are denied. The cross motions for summary end by the }= 4 judgment by the Council plaintiffs in Action No. Campaign plaintiffs in Action No. 2 are granted to the extent of Geclaring that the subleasing of HHC facilitites reculres the application of ULURP and the approval of the Council, znd further 24 . a * declaring that the sublease of CIH to PHS-NY constitutes an Bltra vires act and violates the HHC Act. Settle orders. 25 J At.an IAS Motion Part 5, of the Supreme Court of the State of New York, heid in and for the County of Queens, at the Courthouse located at 88-11 Sutphin Boulevard, Jamaica, New York, on the 57 | day of January, 1997. PRESENT. HON. HERBERT A. POSNER, JUSTICE. CL RN SAD TM ce ge RRR © AL ti dh iT X CAMPAIGN TO SAVE OUR PUBLIC HOSPITALS - QUEENS COALITION, an ORDER AND unincorporated association, by its member JUDGMENT WILLIAM MALLOY, CAMPAIGN TO SAVE OUR PUBLIC HOSPITALS - CONEY ISLAND Index No. 10763/96 HOSPITAL COALITION, an unincorporated association by its member PHILIP R. METLING, ANNE YELLIN, and MARILYN MOSSOP, Plaintiffs, - against - RUDOLPH W. GIULIANI, THE MAYOR OF THE CITY OF NEW YORK, NEW YORK CITY HEALTH AND HOSPITALS CORPORATION, and NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION, Defendants. Plaintiffs Campaign to Save Our Public Hospitals - Queens Coalition, an unincorporated association, by its member William Malloy, Campaign to Save Our Public Hospitals - Coney Island Hospital Coalition, an unincorporated association by its member Philip R. Metling, Anne Yellin, and Marilyn Mossop, having commenced this action seeking 2 declaration that (i) defendants violated New York City Chartec § 197-b by failing to submit their J plans for privatization of Coney Island Hospital, Queens Hospital Center and Elmhurst Hospital Center (the "Subject Hospitals") and requests for proposals to the New York City Planning Commission and the affected community boards and borough presiden:s; (ii) defendants are required to submit their contracts for lease of the Subject Hospitals for review and approval under the Uniform Land Use Review Procedures ("ULURP") set forh in New York City Charter § 197-c; and (iii) defendants’ proposed sublease of Coney Island Hospital to a corporation violates the New York City Health and Hospitals Corporation Act (Laws of 1969, ch. 1016, Unconsolidated Laws §§ 7381 et seq.), and defendants Rudolph W. Giuliani, the Mayor of the City of New York, the New York City Health and Hospitals Corporation, and the New York City Economic Development Corporation, having moved to consolidate this action with an action entitled The Council of the City of New York, et al. v. Rudolph W. Giuliani, The Mavor of the Citv of New York, et al., Index No. 004897-96 (Sup. Ct. Queens Co.) (the "Council Action"), and for summary judgment in both actions, and plaintifis having cross-moved for summary judgment, and the motions having duly come on 10 be heard, v Vv NOW, upon the reading and filing of the defendants’ Notice of Motion to v Consolidate and for Summary Judgment dati on 12, 1996, the pe aint ffs’ Notice of Cross- § Motion for Summary Sudornn dete August 25, 1996, the Atti of Luis Niceoh, M.D. / 7 aed, 11, 1996, and the exhibits thereto, submitted in support of czfendants’ motion to v’ Wg “ v consolidate and for summary epi the Affirmation of Daniel Turbow dated Pe 12, : 0 v Chen ov 7 1996 and the exhibits thereto, the Supplemental Affirmation of Daniel Turbow dated November Vv and +e xh, } 4; There, v v i) r ; vv 19, 1996 andthe exhibils thazetd, and the Supplemental Reply Affirmz:ion of Daniel Turbow oY v , Se re dated November 29, 1996, all submitted in support of defendants’ motion for summary judgment LD. ¢ | and in opposition to Piz cross-motion for summary judgment, if o- 4 j “on 3 44 { ’ f- Rofept [ar AH Aad ober >, 1776 PRY. +H exh: be Fherede JLNNLE a, Shak: ich dated x art—Carvar gota) seemban 20 10Q€ and thao eh 1h to tharats fe WE inoled: on A Stipulation dated Decent ber i7, 194 ¢ , am ctdiry He Arsuer, N Netric e1 Hotes 4 od Nadie cf Cre CS Metin Breeember171006entendins the Annes Neties ot Moten—and-Drotiee-of-CressMetion, and : aa ae FIRE » ; 7, ; the Affidavit of David R. Jones ested August 22, 1996 and the exhibits thereto, the Affirmation of Rachel D. Godsil dated August 23, 1996 and the’ exhibits thereto, the Supplemental . . wv Affirmation of Rachel D. Godsil dated November 19, 1996 and the exhibits thereto, the Affidavit — & bf Oud [0 v ae 2 A x, ; Vv’ of Judith B. Wessler, M.P.H., dsted November 27, 1996 and the exhibits thereto, the Reply vv . v Y . r . Affirmation of Rachel D. Godsil dated November 30, 1996 and the exhibits thereto, all submitted in support of plaintiffs’ cross-motion for summary judgment and in opposition to defendants’ motion for summary judgment, and plaintiffs having appeared by the Puerto Rican Legal Defense & Education Fund, Inc. (Kenneth Kimerling, of counsel), the NAACP Legal Defense & Educational Fund, Inc. (Marianne Engelman Lado and Rachel D. Godsil, of counsel) and the Center for Constitutional Rights (Barbara Olshansky, of counsel), and defendants having appeared by Paul A. Crotty, Corporation Counsel of the City of New York (Daniel Turbow and v b Robert Carver, of counsel), and upon the Order dated Sept somber 18, 1996, granting defendants motion to consolidate to the extent that the Council Action was combined with the instant action effuiclne del Aust, anil for the purpose of a joint trial, without consolidation, and upon the Decision of the Court dafed Vv January 13, 1997, it is ORDERED and ADJUDGED that defendants’ motion for summary judgment is denied, and it is further ORDERED, ADJUDGED and DECLARED that plaintiffs’ cross-motion for summary judgment is granted to the extent of declaring that (i) pursuant to the Health and Hospitals Corporation Act, U.L. § 7385(6), the subleasing of HHC facilities requires the v3. ¢ a 10 ~~ ——— ——.. approval of the Mayor and the City Council; (ii) the subleasing of HHC facilities requires the application of ULURP; and (iii) the proposed sublease of Coney Island Hospital to PHS New York, Inc., constitutes an ultra vires act and violates the Health and Hospitals Corporation Act, and it is further ORDERED that the County Clerk is directed to enter this order and judgment . without costs. ENTER: Case No. 97-01339 SUPREME COURT OF THE STATE OF NEW YORK APPELLATE DIVISION : SECOND DEPARTMENT CAMPAIGN TO SAVE OUR PUBLIC HOSPITALS - QUEENS COALITION, an unincorporated association, by its member WILLIAM MALLOY, CAMPAIGN TO SAVE OUR PUBLIC HOSPITALS - CONEY ISLAND HOSPITAL COALITION, an unincorporated association, by its member PHILIP R. METLING, ANNE YELLIN, and MARILYN MOSSOP, Plaintiffs, - against - RUDOLPH W. GIULIANI, THE MAYOR OF THE CITY OF NEW YORK, NEW YORK CITY HEALTH AND HOSPITALS CORPORATION, and NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION , Defendants. NOTICE OF MOTION FOR LEAVE TO APPEAL PAUL A. CROTTY Corporation Counsel of the City of New York Attorney for Defendants-Appellants 100 Church Street New York, N.Y. 10007 Of Counsel: Elizabeth Dvorkin Tel: (212) 788-0412 NYCLIS No. Due and timely service is hereby admitted. New York, NY. i iii divi wns ai ats 199.