Brief Amicus Curiae PRIDE et al.

    COURT OF APPEALS 
STATE OF NEW YORK 

  

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-Respondents-Cross-Appellants, 

-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-Cross-Respondents. 

  

BRIEF OF AMICUS CURIAE PROGRESSIVE RAINBOW INDEPENDENTS 
FOR DEVELOPING EMPOWERMENT (PRIDE), THE SHOREFRONT PEACE 
COMMITTEE, THE COUNCIL OF MUNICIPAL HOSPITAL COMMUNITY 

ADVISORY BOARDS, THE COMMISSION ON THE PUBLIC'S HEALTH SYSTEM, 
AND THE NEW YORK CITY TASK FORCE ON MEDICAID MANAGED CARE, IN 

SUPPORT OF PLAINTIFFS-RESPONDENT CROSS-APPELLANTS 

  

ARNOLD S. COHEN LOURDES I. REYES 
“ARTHURA.BAER - ~~ NEW YORK LAWYERS FOR THE 
ALLISON BUSCH ; PUBLIC INTEREST 
QUEENS LEGAL SERVICES CORPORATION 30 West 21st Street, 9th Floor 
42-15 Crescent Street, 9th Floor New York, New York 10010 

Long Island City, New York 11101 (212) 727-2270 
- (718) 392- 5646 \ 

- RAYMOND BRESCIA 
URBAN JUSTICE CENTER 
666 Broadway, 10th Floor 
New York, New York 10012 
(212)533-0540 

  

'REPRODUCED ON RECYCLED PAPER 

   



TABLE OF CONTENTS 
  

Table of Authorities............ WR al Te a RR ee iraistisieinetsnisinvessintotieasvisens ii 

Cn Oe RR RE ER rei dieies 1 

Interest OF AICHE Rs he soiitit st Bis sernens inn Goins sans cin sde bts sated es aonssaherathossedinans 1 

The DeCiSioRS BelOW ....ciccoiivcsiini iii vminmimmsensitaninmicvsensscssrmmmniomiisisssninsevernissssnissiisinisensinmsioidacsons 7 

SummMarViol ATSUIENL §.......ccccmmmimmicissmsvnsimssonssasusisomsaiiaombssapsstonsssssissiissmaninerebersssnussisistsnnrsnsésosion 9 

Argufivert CEERI TR hd 5 BREA SU LD SN TE 1 TL HE BON IRA ein 10 
Point: Coney Island Hospital's Status As A Public Hospital Serves The 

: Purpose Intended Under New York State Constitution And The New York 
"Health and Hospitals Corporation (HHCY ACE ..cc.i.iiaisnrmiiverssrmreiriesisnsersissrssrssnl 0 

Point II: Coney Island Hospital's Status As A HHC Hospital Protects The Public's 
Interest In Health Services Through Maintaining the Protections of 
the New York City Health and Hospitals Corporation 
=A PULLIC Bente Bt COMPOTION. corssrsriserssmstsrmerssncrsmrsmmmiismsserississsssnissrssshs 14 
A, BHC As A Public Benefif Corporation... ccuusmicsissseseonmisecinasssivommssassnssnessenans 14 
B. Community Advisory Boards - The Public Voice In HHC Hospitals’ 
+ Bervices AM PIOGTANIS wumsrssssrsrspsermsssmusbssmsissridoissstsirsmsssmssrassssrssssivisssionis 20 

~ Conclusion BX EE LL OUR bra LE Re le nt ad an a amis 23 

 



TABLE OF AUTHORITIES 
  

Cases Pages: 

California Motor Trans. v. Trucking Unlimited, 404 U.S. 508; 92 S. Ct. 609; 30 L. Ed.2d 642 
GE CE re Rn res Ce REO NE Se A I en LR SA re 11 

Campaign to Save Our Public Hospitals v. Giuliani, 172 Misc. 2d 893, 669 N.Y.S.2d 197, 
(QUEENS CRLY I O078,). ii vimmnaimmisimmemivsssaemiinssissismestissss issn ssorisstssss so thatssssrstssshasssssnss 8 

Campaign to Save Our Public Hospitals v. Giuliani, 242 A.D.2d 518, 662 N.Y.2d 265 
(App.Div.2nd Dept.1997) 

Council of the City of New York v. Giuliani, 172 Misc. 2d 893, 664 N.Y.S.2d 197, (Queens 
Cnty. 1997) 00 0000000000000 0000000000000000000000000000000000000000000000000000000000400000000000000000000000000000RCCCOIOEOIOIOCIOEIOIOIOIOIETOIGOIOIEOIORTITSTS 

Council of the City of New York v. Giuliani, 231 A.D.2d 178, 662 N.Y.S.2d 516 (App.Div., 2nd 
DEDLIOOTY  o  cricicisicneemnrmiinisinivinsarinsiotsto tasasorsssiseisissspstenshssnnss ses sniiatssrsnhessssnipentes passim 

City of Rye v. Setiopolitet Transp. Auth., 58 Misc.2d 932, 297 N.Y.S.2d 388; aff'd 24 N.Y. 
28 6 NOB. Hh Ls. reir ills iovnsmrsrssoniisnsasssviinssesmennuivstommssmassssssnsrit gr itt sis ossrssnssssossrsspssnsspusns 10 

Eastern Railroad Presidents Conference v. Noer Motor Freight, 365 U.S. 127; 81 U.S. Ct. 523; 5 
L. BA.20 460 C1981) i.voiiosisersessssstsivnsiinsisisssosscnnsssissestinassrbosassssssoossbinssnsnsinsrsimmamnesboncsmsraesssssensassors 12 

Matter of Potash v. Molik, 35] Misc.2d 1; 230 N.Y.S. 2d 544 (1962), aff'd on different grounds, 
232 N.Y.S.2d 993 (App.Div. 40 Dept. 1962) FAECES Re 12 

  

The Mayor v. The Eighth Avenue R. R. Co., 43 Hun 614 (1887); affd 118 N.Y. 398 (1890)......10 

People of the State of New York v. Richard Gottfried, 6 Misc.2d 305, 314 N.Y.S.2d 725 (am) ]- 

Potter v. Collis, 19 A. D. 392,46 N.Y.S. 471 (1987); affd, 156 NY. 16 (1898). EER 10 

Pickering v. Flacke, 115 Misc.2d 264; 453 N.Y.S.2d 1016 A958 rirrsiiiirssrsivinensiiniitin eitineienis 11 

"Town of Hoosick v. Eastern Rensselaer County Solid Waste Mgt. Auth., 182 A. D. 2d 37, 592 
N.Y.S.2d 472 (1992). HARARE RRA RASS 11 

Weiss v. Willow Tree Civic Assocs., 467 F. Supp. 803 (1979) pi Sp RA REEL Bera iressrnast 12 

Constitutional Provisions | 

U.S. Const. Amend I. A I RR SS 11 

RE A RE Ce I 12 

NL COE ARID is A i RR Ran ho 9 

N.Y. Const. Art. XVII §1 SEER Sas Ln ERR le ii 9 

Cal ER Rtiid 

N.Y Const. Art. XVII, §4....... ware rtirteas slid Hh Aha a Se ans 9 

ofl 

 



Statutes and Rules | Pages: 

an ar VEO CN ee ll EL 15 

NY. But Cot 710k vimencescommmsebessintions I Dn a 13,14 

a bon EL TOR GY 0 CS LR en OR Ri LO Re 16 

N.Y. Gen. Constr. So CL eS se ea Te 9 

NY. Gent IV UN, S800... til fore itsebrisrtsttostssositorsssisssnsss sth steskinss sts sorssnsssrrsssodeomasorresisansssssaney 14 

ha a ah 14 

N.Y. Geri. Mun. §802.......cccce... A LT in 14 

RY Con Mum a Lo Lr Ents iT sis 14 

N.Y. Gen. Mun. 8305-3 ......co0reersee Iie eer nent sees ar ert) fete consesobtannvissieetecans na eccevasaniei 14 

NY Pub OL SR a i a is 16 

AER ECR Nb ER tar 17 

NY Pils OLE BSI) iit sisson sien ole deny Sedna Tl wl 

N.Y. Pub. OFF. §100....c00pvivese issn: Em A an i 15 

N.Y. Pub. Off. §102............ En ni cs Lai ni 14,15 

NYP ONS is a ES 

N.Y. Pub. ORR i Se en Le 15 

N.Y. Pub. Off. §105 Sl a Ee dt a 15 

NPE OI BI08, hh 16 

N.Y. Pub. Off. IO i LR nit aaris seas tg ars does es antes hens fons 16 

HR EE EL CEL MEI EL 9. 
N.Y. Unconsol. §7384[3]......c.cccccn. ead ilies ul Ly WE oA 14 

N.Y. Unconsol. §7384[4].........iccerwrrrre an RARE A 

NY Ueontol BT3RMISY 1... docsters npsse ot tise wi LT 

NY. Unconsol. SHS a ered neko are RN ER 185 

NY. Unconsol. S730410). co. ani ot rie CIERRA 1 

 



N.Y. Unconsol. §7384[11].....cccrvrrvvuriirmmnrnsinnsnississsississisi sisson, 12,19,20 

  

N.Y nobel 87300 R acho. nde anin. Sor. Jeselining. Emansemert ERT ha 14 

HHC Policy Guidelines BL oi hile sili vine deissnss thohmnssidessstusnsdiotasssvibinoasnsapcaninssinnivodnn 20 

HHC Policy Guidelines, Bl. i coil hin citi didi issariibussrs nt bondasionin bhinstossss epvemes ta Sina 20 

HHC Policy GUIAelines, 8 VV. cov dn fin di iss dslosis iis tes sia sssrrtrasi ban feasobid sens ARIE Er tg 20 

Secondary Sources : Pages: 

Galie, Peter J., The New York Constitution: A Reference Guide (1991).....occiiirciniivinnniovivssicns 10 

Liv 

 



Preliminary Statement 

The Progressive Rainbow Independents For Developing Empowerment (PRIDE), the 

Council of Municipal Hospital Community Advisory Boards, Richard N. Gottfried, Chair of the 

Assembly’s health Committee, the Shorefront Peace Committee, the Commission on the Public's 

Health System, and the New York City Task Force on Medicaid Managed Care file this amicus 

curiae brief urging this Court to: 1) affirm the holding by the Supreme Court of the State of New 

York, Appellate Division Second Department, that the sublease of Coney Island Hospital (“the 

Hospital”) to PHS-New York, Inc. constitutes an ultra vires act that violates the New York City 

Health and Hospitals Corporation Act (“HHC Act”); and 2) reverse the Appellate Division's 

dismissal of the trial court's decision that any sublease of a facility of the New York City Health 

and Hospitals Corporation ("HHC") requires the application of the Uniform Lend Use Review 

Procedure (ULURP) and approval of the City Council. This brief addresses the reasons why the 

proposed sublease contravenes the purpose of the Health and Hospitals Corporation. This brief 

is filed with the consent of all the parties. | 

: Interest of Amici Curiae 

The Progressive Rainbow Independents For Developing Empowerment (“PRIDE”), is an 

unincorporated organization founded in 1988. It seeks to address problems of the Coney Island 

community and adj acent areas through civic and community activities. PRIDE promotes public 

awareness of the political process, awareness of local and national problems affecting the well- 

: being of the community; and attempts to work toward their resolution. It also seeks fo promote a 

multi-cultural awareness and sharing of different cultures in the community in an effort to 

encourage harmony while struggling to obtain equality for all peoples. PRIDE counts -among its 

sixty members, residents of large public housing from the Coney Island and Marlboro : 

‘neighborhoods who rely on Coney Island Hospital to serve thelr needs -- many are working poor 

who are uninsured or underinsured. 

The Shorefront Peace Committee (SHP), is an unincorporated organization founded in 

 



1980. It seeks to aditers civil liberties, political and health care issues within the Coney Island 

community. In the last three to four years it has worked with PRIDE in an effort to mobilize the 

community against the privatization of Coney Island Hospital. The principal reason for SHP’s 

concern over privatization is that Coney Island Hospital’s current mission, like that of NYC 

~ public hospitals, ensures that there is access to all persons regardless of their ability to pay. It 

believes that pEivazsion may limit access to health care in Coney Island. Many of its members 

rely on Coney Island Hospital because they lack money or insurance. 

The Council of Municipal Hospital Community Advisory Boards is comprised of the 

representatives of the Communiiy Advisory Boards (CAB) for each of the Health and Hospitals 

Corporation's hospital networks, which include long-term care facilities and diagnostic treatment 

centers. CABs, which are comprised of fepresentatives from the community served by HHC 

hospitals, are established under §7384 [subd.11] of the Unconsolidated Laws of New York (the 

“HHC Act”). Each CAB meets monthly in order to consider and advise the HHC and the 

particular individual hospital on fitters concerning the development of any plans or programs of 

the corporation or hospital. | 

The Commission on the Public's Health System (“the Commission”) is an unincorporated 

! association founded in 1991. It is dedicated to ensuring that health care services are available to 

all New Yorkers od that New York City's public health and hospital system is financially and 

strctually wiltle The Commission is a Citywide organization, which counts fing its 300 

members, health care consumers, community organizations, professional organizations, health 

care advocates, ‘and health care workers. It engages in outreach and educational activities for 

: community organizations and conducts policy and budget analysis of health care systems in New 

York City. Commission members and individuals for whom the Commission advocates, 

| regularly depend on the public hospitals i in New York City for their own health care and the 

health care of their families. 

   



The New York City Task Force on Medicaid Managed Care (the “Task Force”) is a 

coalition of nearly 200 individuals and organizations dedicated to ensuring that New York State's 

Medicaid Managed Care Program serves the health care needs of Medicaid beneficiaries. The 

Task Force members and individuals for whom it advocates depend on the public hospitals in 

New York City on a regular basis for their own health care, and the health care of their families. 

The Task Force also engages in outreach and educational activities for community organizations 

and conducts policy analysis of the New York State's Medicaid Managed Care Program. HHC 

facilities are safety-net providers within the State's Medicaid managed care plan. Changes to - 

HHC’s network, such as leasing Coney Island hospital to PHS-NY, will effect the health care 

- services and the lives of many of the Task Force members. | 

| The question of whether the HHC Adbauthorizes the Mayor of the City of New York and 

HHC to sublease the Hospital in the manner proposed is of great concern to amici and its 

Soliton: members. The resolution of this issue will have a significant impact on the following 

interests of the community: its ability to participate in the hospital's decision making process, as 

provided by law; its ability to access the services offered by the Hospital; and its right to petition. 

the legislators. Amici have a direct interest in the {ssues. preserited in this case and submit this 

brief to plovide the court with the benefit of their expertise on the important issues presented by 

"this case. 

Statement of the Case 

Amici -adopt and incorporate herein the statement of facts of plaintiff-respondents in their brief on 

appeal. 

 



The Decisions Below 

In March 1996, the City Council brought an action for declaratory judgment against the 

Mayor, the New York City Health and Hospitals Corpordiion and the New York City Economic 

Development Corporation alleging that the planned privatization of the three hospitals by means 

of subleases with private institutions was subject to the Uniform Land Use Review Procedure, 

and required City Council approval. See, Complaint §' 1(a) & (b), Council of the City of New 

York v. Giuliani (No. 97-01337). In May 1996, several residents, community and public health 

groups brought a similar action against the Mayor and HHC, contending that the City's 

privatization plan and attendant subleases must be submitted for approval to the New York City 

Planning Commission, the affected community boards and the Borough Presidents of Brooklyn 

and Queens pursuant to § 197-b of the New York City Charter, and that the siblzale must be 

reviewed and approved under the Uniform Land Use Review Procedure ("ULURP") pursuant to 

§ 197-c of the New York City Charter. see Complaint 3, Campaign to Save Public Hospitals v. 

Giuliani (No. 97-01339). ~ 

The two cases were combined for joint trial, without consolidation. After the defendants 

moved for summary judgment in both cases, plalntiits cross-moved for summary judgment. 

While these motions were pending, on November 8, 1996, the Board of Directors of defendant | 

"HHC voted to empower HHC's president to execute the Coney Island lease with PHS-NYC. 

‘Both plaintiff accordingly amended their complaints to include a claim that HHC lacked the 

statutory power to sublease the hospitals. See Council v. Giuliani, 173 Misc. 2d 893, 894-88, | 

N.Y.S. 2d (Queens Sup. Ct. 1997). | | med 

On January 13,1997, the Supreme Court, Queens County (Posner 1.) denied deteridalitd 

| motion gr summary judgment and granted plaintiffs cross-motion to the extent of Secioring that 

the subleasing of an HHC facility was subject to ULURP, that Cotiaeil approval was required, 

and that the sublease of Coney Island Hospital to PHS-NY was an ultra vires act in violation of 

   



motion for summary judgment and granted plaintiffs’ cross-motion to the extent of declaring that 

the subleasing of an HHC facility was subject to ULURP, that Council approval was required, 

and that the sublease of Coney Island Hospital to PHS-NY was an ultra vires act in violation of 

the HHC Act. See Council, 173 Misc. 2d 904-05. After the Defendants' appeal, on Jone 9, 1997, 

the Appellate Division, Second Department, affirmed without dissent the Supreme Court's 

determination that the sublease of Coney Island Hospital was an ultra vires act. See Campaign to 

Save Our Public Hospitals, 242 A.D.2d 518, 662 N.Y.S.2d 265; Council, 231 AD.2d 178, 662 

| N.Y.S.2d 516. ‘The court held, however, that the Supreme Court should have dismissed the 

demands for declaratory relief on the remaining issues in the case. See Council, 231 A.D.2d. at 

183. 

In reaching its decision that HHC's attempts to sublease Coney Island Hospital to a for- 

profit entity were ultra vires, the Appellate Division reasoned: 

HHC was established as a public benefit corporation by the State 
Legislature in 1969 (see, McKinney's Uncons. Laws of N.Y. §7381 

. et seq. [New York City Health and Hospitals Corporation Act] 
[hereinafter NYCHHCA]; L.1969, ch. 1016, as amended. 
Resolution of the issue of whether HHC has the authority to 
privatize its hospital facilities begins with the language of the 
enabling statute (see, Giuliani v. Hevesi 90 N.Y.2d 27, 659 
N.Y.S.2d 159, 681 N.E.2d 326). In interpreting the statute, "the 
spirit and purpose of the act and the objects to be accomplished 
must be considered. The legislative intent is the great and 
controlling principle” (Ferres v. City of New Rochelle, 68 N.Y.2d 
446, 451, 510 N.Y.S.2d 57, 502 N.E.2d 972, gioing People v. 

Le Ryan, 274 NY. 149, 152, 8 N.E.2d 3 

The purpose. and intent of he NYCHHCA was to establish one 
entity accountable to the public to operate the municipal hospitals 
for the benefit of the public. A construction of section 5(6) of the 
NYCHHCA (McKinney's Uncons. Laws of the N.Y. § 7385[6]) 
which would permit the defendants to turn over the operation of an 
entire hospital to a private entity by means of a 99 year sublease 

y would be inconsistent with the intent and purpose. : 

231 A.D. 2d 180, 182 662 N. Y. S.2d. 517, 518 (emphasis in original)] 

The defendants in the Council cases ht leave to appeal to this Court from the 

 



Appellate Division, which was denied. Defendants then sought leave to appeal directly from this 

Court, which was granted on June 4, 1998. See Campaign to Save Our Public Hospitals v. 

Giuliani, Mo. No. 324 (June 4th, 1998) (order granting leave to appeal). 

Summary of Argument 

In 1969, the New York State Legislature used its exclusive authority under Article X, §5 

of the New York State Constitution to create the New York City Health and Hospitals 

Corporation (HHC) - a public benefit corporation. HHC id other Defendants below seek to 

significantly change its operation independently by privatizing HHC hospitals without seeking 

prior legislative approval. Allowing such changes to HHC to take place outside of the legislative 

process undermines the public's right to petition its elected representatives and influence what 

happens to HHC through the legislative process. HHC, being created as a public benefit 

corporation, not only receives special powers, but is limited by certain duties and constraints 

intended to elnfotce HHC's public purpose and protect the public's interest. These requirements 

are, many ways, distinct and dosent from requirements placed on private corporations, wididh 

have the primary purpose of obtaining an economic return on an investment. Among the most 

important of these are oversight mechanisms, -including Community Advisory Boards, that 

ensure that the public's voice is heard and that the public's Hiterest is paramount in the HHC's 

eration: These protections should not be Tinted independent of the legislative process. 

What this Court decidés will have far reaching implications not only for HHC, but for all 

~ public benefit corporations in the State. Indeed, if the operations of HHC, or other public benefit 

corporations, are permitted to be privatized, the Legislature's brofciions and efforts to secure the 

public and government of functions of oh public benefit Sorporations would be eviscerated - a 

drastic step which should not be allowed by this Cou or be undertaken by the Ideienient | 

actions of the public corporation, which is itself merely an entity created by the State. See Gen.  



Constr. Law §66 [subd. 1]. 

Argument 

| Coney Island Hospitals Status As A Public Hospital Serves The Purposes 
Intended Under New York State Constitution And The New York City 
Health and Hospitals Corporation HHC Act. 

  

  

New York State is constitutionally mandated to "aid, care and support [ ; ] the needy." 

N.Y. Const. Art. XVII, §1 "The protection and promotion of the health of the inhabitants of the 

State are matters of public concern" which must be provided for by the State and its subdivisions. 

N.Y. Const. Art. XVII, §31. As part of its efforts to fulfill these constitutional obligations, the 

New York State Legislature passed the New York City Health and Hospital Corporation Act 

(HHC Act). The Act established a public benefit corporation - the New York City the Health and 

Hospitals Corporation (HHC) - to provide needed health and siadica] services and health 

facilities in New York City: HHC Was, among other reasons, created to deliver “high quality, 

dignified and comprehensive care and treatment for the ill and infirm, Setticuiorly to those who 

can least ait such services." N.Y. Unconsol. Law § 7382. Its purpose and operations are "in 

all respects. [to be] for the benefit of the state of New York and of the City of New York." ‘1d. 

HHC's "functions, powers and duties" have been declared and deteinined by the Legislature to 

constitute "the performance of an essential yHUlE and governmental function." As a public 

benefit corporation, HHC is organized to operate in the state and any "profits" it generates, by 

definition, are to "inure to the benefit of this state, or to the people thereof." see N.Y. Gen. 

~ Contstr. Law. §66 [subd.3]. | 

The New York State Legislature, in creating HHC, was exercising its exclusive authority 

under Article X, §5 of the New York State Constitution, which pertinently provides: 
No public corporation... possessing both the power to contract 

. indebtedness and the power to collect rentals, charges, rates or fees 
for the services or facilities furnished or supplied by it shall 
hereinafter be created except by special act of the Legislature. 

  

1 See also N.Y. Const. Art XVII, § 4.  



As one commentator explains, this power was reserved to the Legislature in order to 

prevent local authorities from being able to create such entities independently: 

This article is the first attempt to regulate constitutionally entities 
known as authorities or, more formally, public benefits 
corporations. These are separate, largely autonomous corporations 
and not operating departments of the state. They share certain 
common characteristics: they are created by special act of the 
legislature; possess broad administrative autonomy; usually 
finance themselves through bond issues, users' fees, or tolls; and 
operate outside the normal constitutional and statutory restrictions 
of state government... 

By 1938, the state had -thirty-three such authorities. Their 
unregulated growth prompted the adoption of this article. Its 
provisions reflect an ambivalence toward these authorities: on the 
one hand they unquestionably were convenient and did necessary 
work; on the other they created "serious dangers." Governor Al 
Smith, a delegate to the convention , caught one side of this 
ambivalence when he said this article would "paralyze the one 
method we have discovered of getting work done expeditiously 
without taxing our people." The first paragraph implicitly 
recognizes their value but requires that they originate in a special 
act of the legislature, thus requiring the legislature to pass directly 
on the establishment of each new authority. Without state 
approval, it was argued, local authorities would multiply 
unnecessarily. ~~ The establishment of these public benefit 
corporations was considered a sovereign power that should not be 
delegated.... 

[Galie, Peter J., The New York State Constitution: A Reference Guide (1991), at p. 227] 
  

Recognizing the importance of the public interest, the Legislature carefully delineated the 

| role the public should play i in the oversight of public benefit corporaions, generally and HHC, in 

particular. Having done that, the authority to modify HHC's mission and methods of operation | 

resides in the State Legislature? and not the Appellants. This principle of legislative authority is 

Coiamenii and has long been recognized in this State. For example, in Potter v. Collis, the 

courts faced an attempt by the City to control a municipal corporation in a manner that would 

fterteis with the corporation's basic role and function. The Appellate Division made clear that 

in its view ‘such changes, if any, were to be made by fhe State Legislature. The court held that 
  

2 See City of Rye v. ets enallon T ransp. Auth, 58 Misc 2d 932, 297 .N.Y.2d 388; aff d 24 N.Y. 2d 627 (1969). 

- 3 See The Mayor v. The Eighth Avenue R.R.. Co., 43 Hun 614 (N.Y. 1887); affd 118 N.Y. 398 (1890). 

«4 19 AD. 39240 N.Y.5: 471 (257 aff'd 156 N.Y. 16 (1898). : ; 

8  



“the legislative power, unless restricted by special constitutional provision, is absolute as to the 

control over such property so held by the municipal corporations. . . . “The Legislature, as trustee 

for. . . the general public, has full control over the public property and the public rights for 

municipal corporations’.”> This Court, altming the appellate court's decision in Potter, stated 

that “it is clear that the only power to modify the relation held by the city corporation, and to 

increase the corporate authority, reside in the state, as the creator of the corporation, acting 

through the legislative body.”® This fundamental principle is still recognized today.’ 

Indeed, by the attempting to usurp the authority vested in the Legislature, Appellants not 

only committed an ultra vires act, they also affect the public's right to participate in and impact 

on changes in HHC policies through their elected State representatives®-- a right that is 

fundamental under the New York State Constitution.” Article 1, § 9 of the New York State 

Constitution, similar to the First Amendment of the United States Constitution,” pertinently 

provides that “[n]o law shall be passed abridging the rights of the people peaceably to assemble 

‘and fo petition the government, or any department thereof ..." The importance of the right to 

petition has been recognized by many courts, including the U.S. Supreme Court, which 

explained: 

the right to petition governmental bodies that make and Enforce the law is 

central to our representative democracy, because, ‘these branches of the 

government act on behalf of the people, and to a very large extent, the 

whole concept of representation depends upon the ability of the people to 

  

~ % Potter at 396 (direct quote from lower court cite omitted). 

° 156 N.Y. 16, 29 (1898) (emphasis added). 
! See City of Rye v Metropolitan Transp. Auth., 24 NY2d 627, 634; Town of Hoosick v Eastern Rensselaer Cont Solid 

Waste Mgt. Auth., 182 4.D.2d 37, 592 N.Y.S.2d 472 (1992) (App. Div., 3® Dept.). : 

* “Citizens or groups of them. . . have a right to petition all departments of Government. The ddiit of access to the courts 

is indeed but one aspect of the right to petition.” See California Motor Trans. V. Trucking Unlimited, 404 U.S. 504, 611- 

12 (1972). (Emphasis added.) - : ; : 

® NEW YORK STATE CONST. art. I, §9. - 

"0 See People of the State of New York v. Richard Gottfried, 64 Misc2d 305, 314 N.Y.S.2d 725 (1970); see also, Pickering 
_ Vv. Flacke, 115 Misc.2d 264, 453 N.Y.S.2d 1016, 1017 (1982) (“[The right to Ptilion} 2 are intimately connected both in 

origin and in purpose with the rights of free speech and press.") 

9  



make their wishes known to their representatives.’ 

The Appellants ish to Als changes to the methods of operation and mission of 

- HHC outside of the legislative process infringes on the right of the public to petition and to be 

heard by their representatives. It effectively prevents the public from having meaningful input 

into any proposal to privatize Coney Island Hospital through the legislative process until after the 

fact. | 

The HHC Act itself is consistent with the New York State Constitution, as it specifically 

provides for public participation in the matters affecting HHC and its hospitals. N.Y. Const. Art. 

I, §9. The HHC Act affords the community access to information about HHC and its hospitals 

and allows the public to voice its concerns to HHC on matters which the board has authority to 

hear. NY. Unconsol. Law § 7384 [subd. 10] and [subd. nu Jncorioiates opporttnities for the 

public to gather information and voice their concerns on the programs and plans of the 

Corporation through, among other ways, the HHC’s annual meeting and the Cealinnnity 

Advisory Boards (CAB). Id. 

HHC Appellants’ in their brief recognize the importance of public participation in the 

operations and review of the operations and programs of the public hospitals by raising the role 

of the Department of Health (DOH), the State Hospital Review Planning Council and the Public 

Heol Council's review of PHS' takeover of CIH. Appellant's Brief at 11- 12. Nonetheless, the 

review does not allow for the public to voice their concerns, except i upon the HR of one of the 

» entities or by the applicant if application is denied. See Pub. Health Law §2801-22.(1998), Nor 

does their review allow access to legislators; ‘thus it does not justify the Appellants’ 

circumvention of State Legislature. 

  

" Eastern Railroad Presidents Conference v. Noerr Motor Freight 365 U.S. 127, 81 S.Ct. 523, 5 L. Ed.2d 464 (1961); See 
Weiss v. Willow Tree Civc Assoc., 467 F. Supp. 803, 816 (1979), 365 U.S. 127,137 (1961). see also, Matter of Potash v. 

Molik, 35 Misc.2d 1, 230 N.Y.S.2d 544, aff d on different grounds 232 N.Y.S.2d 993 (The trial court held on the issue of 

permissive referendum petition that “[c]ertainly the electors of the City of Buffalo should not be deprived of their right to 

petition their local goverment by way of referendum by a narrow, restrictive and erroneous interpretation by the 

examiner r of the requirements. . .." 

\ 

- 10"  



  

II. Coney Island Hospitals Status As A HHC Hospital Protects the Public's Interest 

  

Through The New York City Health and Hospitals Corporation - A Public. 

Benefit Corporation. 
  

The Legislature by creating HHC as a public benefit corporation, afforded the public the 

considerable protections, both those afforded by public benefit corporations, generally, and 

equally important, those afforded as constitutive elements of HHC itself. As will be outlined 

below, by privatizing Coney Island Hospital, and effectively severing its operations from many 

of these protections, there will be a significant loss in the public's ability to oversee, have input 

on, and affect the health services and programs provided by Coney Island Hospital. 

A. HHC As a Public Benefit Corporation 
  

As a public benefit corporation, there are two broad Ckries of laws which regulate 

HHC in accord with the public's interest. The first set of protections are those Gidiinds to 

prevent conflicts of interest, which may result if personal pecuniary considerations are elevated 

~ over the public purposes fitended by the HHC Act. The second set of protections are those 

designed to ensure public overdioht and the mission of HHC. 

HHC Directors are "not entitled to compensation for their service" but may be reimbursed 

only for their “actual and necessary expenses incurred....in the performance of their official 

duties." N.Y. Unconsol. Law §7384 [subd. 4].” HHC is deemed a "municipal corporation" and 

its Directors are deemed "municipal officers" for the purposes of Article 18 of the New York - 

General Municipal Law. Id As such, HHC's Directors must comply with the elaborate system 

of law designed to prevent conflicts of interest by municipal officers and employees set forth in 

~ Article 18. See N.Y. Gen. Mun. Law. § 800, et seq. Article 18 generally prohibits any HHC 
  

2 ‘The agreement between HHC and PHS-NY makes this severance clear. As section 41.10 of the PHS-NY 
lease states: =~ This Lease is not to be construed to create a partnership or joint venture between the 

~ parties, it being the intention of the parties hereto only to create a landlord and tenant relationship. 

[Joint Appendix at p.473x] | 

Bn gonired, private corporate board members may be compensacd.o see, N.Y. Bin, Corp. Law §713(0) 

+11  



  

Director from having "an interest in any contract with [HHC ...when such] officer... has the 

power or duty to (a) negotiate, prepare, authorize or approve the contract..." N.Y. Gen. Mun. Law 

§801. If a Director miles an interest in any actual or proposed contract, he or she must 

disclose such interest in writing as soon as he or she has knowledge. N.Y. Gen. Mun. Law §803. 

That disclosure must be made part of the official vetond of the proceeding of such body. Id. 

Indeed, a contract willfully entered into by HHC in which there is a prohibited interest is 

deemed "null, void and wholly unenforceable". N.Y. Gen. Mun. Law §804." Moreover, HHC 

Directors are specifically prohibited from the following: (1) receiving any gifts of seventy-five 

* dollars or more; (2) disclosing confidential information acquired in the course of their official 

duties; (3) using such information to further personal interest; and (4) receiving or entering into, 

an agreement for compensation for series to be rendered by HHC. see N.Y. Gen. Mun. Law 

| §805-a(1)(a), (b) and (c)." 

Public oversight and accountability are also ensured by such laws as the New York Open 

Meetings and Freedom of Information Laws. Under the Open Meetings Law, HHC is defined as 

a public body. See N.Y. Pub. Off. law, §102(2) ("Public body means any entity for which 

quorum is required to conduct business... For ’ public corporation defined in section sixty-six of 

the general construction law"); N.Y. Unconsol. Law §7384[3] ("The powers of the corporation 

shall be vested in and exercised by the board...; provided that neither business nor the piwers of 

_ the corporation shall be exercised or transacted except to the favorable vote of at least a majority 

of other directors present at a meeting at which a quorum is in attendance.") As such itis So ect 

to the requirements of the Open Meetings Law (Article 7 of the Public Officers Law), See N.Y. 

Pub. Off. law §100 et seq. Consequently, all of its meeting are required to be open to the general 

  

4 Compare, N.Y. Bus. Corp. Law §713(b) (providing the option to the ‘board to avoid a contract "unless the party or 

parties thereto shall establish affirmatively that the contract or transaction was fair and reasonable as to the corporation at 

the time it was approved by the board, a committee, or the shareholders."), with N.Y. Gen. Mun. Law §802. 

'> And under the HHC Act itself, it is a misdemeanor for a director, officer, agent, executive or other HHC employee to be 

interested, directly or indirectly, as principal, surety or otherwise, in a contract, the expense or consideration thereof is 

. payable out of funds of the corporation. N.Y. Unconsol. Law §7391. 

12  



public, except for the limited circumstances in which it is allowed to go into executive session. 

See N.Y. Pub. Off. Law §§103(a) and §105.'® It is required to provide public notice of the time 

and place of a scheduled Board meeting to the news media at least one week before the meeting's 

scheduled date. It also must provide public notice of the meeting in one or more designated 

public locations at least seventy-two hours before the meeting is scheduled to take place. N.Y. 

Pub. Off. Law §104(1)."” Meetings are defined as the official convening of the public body for 

the purpose of conducting public business. N.Y. Pub. Off. Law §102(1). 

Minutes are tequiied to be taken at all open meetings, (i.e., non-executive sessions) of the | 

HHC Board. These minutes must include a record or summary of all motions, proposals, 

  

'* Section 105 provides: 

1. Upon a majority vote of its total membership, taken in an open meeting pursuant to a 

motion identifying the general area or areas of the subject or subjects to be considered, a 

. public body may conduct an executive session for the below enumerated purposes only, 

provided, however, that no action by formal vote shall be taken to appropriate public moneys: 

a. matters which will imperil the public safety if disclosed; 

b. any matter which may disclose the identity of a law enforcement agent or 

informer; 

c. information relating to current or future investigation or prosecution of a 

criminal offense which would imperil effective law enforcement if disclosed; 

d. discussions regarding proposed, pending or current litigation; 

. e. collective negotiations pursuant to article fourteen of the civil service law; 

f. the medical, financial, credit or employment history of a particular person 

or corporation, or matters leading to the appointment, employment, 

promotion, demotion, discipline, suspension, dismissal or removal of a 

particular person or corpastion; 

g. the preparation, orading or ecnilhisivation of examinations; and 

h. the proposed acquisition, sale or lease of real property or the proposed 

acquisition of securities, or sale or exchange of securities held by such public 

body, but only when publicity would Substantially affect the value thergot. 

2. Attendance at an executive session shall ve permitted to any member of fhe public 

body and any other persons authorized by the public body: 

"7 Compare, N.Y. Bus. Corp, Law §711. 

13  



  

  

resolutions on any matter voted upon and the vote. N.Y. Pub. Off. Law §106(1). Minutes must 

also be taken at executive sessions at which there is a final vote. These minutes must include a 

record or summary of the final determination of the action, the date and the vote. N.Y. Pub. Off. 

Law §106(2). Meeting minutes must be made available to the public pursuant to the Freedom of 

Information Law within two weeks, unless they are minutes of a final vote taken at an executive 

session, in which case they must be made available within one week. N.Y. Pub. Off. Law 

§108(3). HHC is defined as a public corporation under Article 6-A, §145 et seq., of the 

Executive Law, and as such may, as permitted, publish required notices in the State Register. 

~ The New York Freedom of Information Law, Article 6, §84 et seq., of the Public Officers 

Law, defines HHC, a public Gotpotlion: as an agency, and consequently, it is subject to the law's 

disclosure requirements. N.Y. Pub. Off. §86[3]. HHC is required to make available for public 

inspection and copying all records except those exempted under the law.”® Records include any 
  

18 Section 87[2] provides: 

2. Each agency shall, in accordance with its published rules, make available for public 

inspection and copying all records, except that such agency may deny access to records or 

portions thereof that: 

(a) are specifically exempted from disclosure by state of federal statute; 

(b) if disclosed would constitute an unwarranted invasion of personal privacy 

under the provisions of subdivision two of section eighty-nine of this article; 

{c) if disclosed would impair present or imminent contract awards or 

collective bargaining negotiadons; 

-.(d) are trade secrets or are submitted to an agency by a commercial enterprise 

or derived from information obtained from a commercial enterprise and 

which if disclosed would cause substantial i injury to D the competitive position 

of the subject enterprise; 

(e) are compiled. for ow enforcement | purposes and which, if disclosed, 

. would: : 

i. interfere with law enforcement investigations or judicial proceedings; 

ii. deprive a person a right to a fair trial or impartial adjudication; 

iii. identify a confidential ‘source or disclose confidential information 

relating to a criminal investigation; or 

iv. reveal criminal investigative techniques or procedtiics; except 

routine techniques and procedures;  



  

information kept, held, filed, produced or reproduced by or with or for an agency in any physical 

form including, but not imited to, reports, statements, examinations, opinions, folders, files, 

books, manuals, pamphlets, forms, papers, designs, drawings, maps, photos, microfilms, 

computer tapes or discs, rules, regulations or codes. N.Y. Pub. Off. §86[4]. 

Under the Freedom of Information Law, HHC is also required to maintain: (1) a record of 

the final vote of each member in every pioceading in which the member votes; (2) the name, 

public office address, title and salary of every officer and employee; and (3) a reasonably detailed 

current list by subject matter of all records in the possession of the agency, whether or not 

Svallbleinder the Tow, NY. Pub. Off. §87[3](2)-(c). 

Those mechanisms that are generally applicable to public corporations, such as HHC, 

have been supplemented with other specific provisions adopted by the Legislature in establishing 

"HHC. These provisions are also designed to ensure fairness in contracting, as wall as st 

input and oversight. To facilitate public oversight, the HHC board is required to hold an annual 

meeting. N.Y. Unconsol. §7384 [subd. 5]. HHC itself is required to keep each of its facilities 

and installations open to Inspections by authorized representatives of the State Board of Health, 

the State Department of Health, the Mayor of the City of New York, the Director of Management 

  

(f) if disclosed would endanger the life of safety of any person; 

: 5 ¢ . : 

(g) are inter-agency or intra-agency materials which are not; 

i. statistical or factual or factual tabulations or data; 

ii. instructions to staff that affect the public; 

. iii. final agency policy or determinations; or 

iv. [Eff. until Jan. 1, 1999] external audits, including but not, Hiniied to 

audits performed by the comptroller an the federal govemmeny or 

(h) are examination questions or answers which are requested prior to the final 

administration of such questions. 

(i) are aries access codes. 

0 (Eff until Dec. 1,1999.] are o phologentii iereshotogioplin videotind or other 

recorded images prepared under authority of section eleven hundred eleven a of the 

vehicle and traffic law. 

15  



and Budget of the City of New York, the Comptroller of the City of New York, the Health 

Services Administration of the City of New York, and other authorized state, federal and city 

~ departments or agencies. HHC is required to provide them access to all records, reports, books, 

papers and accounts of HHC, other than privileged medical matters. N.Y. Unconsol. Law 

§§7384 [subd. 9] and 7383. Apart from the annual meeting required of the Board, HHC itself 

rads hold an annual public meeting after due public notice for "purposes of informing the public 

of the programs and plans of the corporation." N.Y. Unconsol. Law §7384[subd. 10]. Moreover, 

as set forth below, HHC is required to seek the public's advice through Community Advisory 

Boards. 

16  



B. Community Advisory Board - The Public Voice In HHC Hospital Services and 
Programs 
  

HHC is required to "establish a community advisory board [(CAB)] for each of its 

hospitals to consider and advise [HHC] and the hospital upon matters concerning the 
  

development of any plans or programs of [HHC]...." N.Y. Unconsol. §7384 [subd. 11] (emphasis 

added). Explicitly set forth by the Legislature in the enabling statute itself, the CABs are a 

constitutive element of the HHC system. Their elimination is in and of itself an ultra vires act. 

CABs were designed to provide community input into the operation of each of the local public 

- hospitals. They serve as the primary means through which HHC hospitals can solicit the views 

and advice of the communities they serve. Although previously provided for in the Public 

Health Law, no similar mechanism generally exists through whic private hospitals can gauge 

the needs of the community. 

‘The challenged conversion of Coney Island Hospital from a public to a private hospital 

facility will effectively eviscerate this requirement of community consultation, by creating a’ 

vel contractual substitute that allows the for-profit PHS-NY to appoint 6 of the "Boards™ 12: 

members." As the contract makes clear: "[ij]n no event shall the [so called] Community 

Advisory Board be deemed hereunder a pill: body." [Yokt Appendix at p. 473g] Indeed, the 

only other machnalsm for community input into the function of the private hospitals -- Pub. 

Health Law Section 2803-1 which provided for "Community Service Plans" -- oppliss only to: 

voluntary non-profit general hospitals. See McKinney's Public Health Law, Sec. 2803-1 (197 

Cumulative Pocket Part). | | | | 

* When combined with the organizational changes outlined above, namely, the elimination 

of the role of both the Legislature, as well as that of that HHC Board in the decisions of the 

| private hospital slated to assume the responsibilities of Coney Island Hospital, the effective 

  

9 Under the contract, the six other members ‘will be appointed as follows. HHC will appoint two (2) members, the 
Borough President act the Community Board together will appoint two (2) members, and the Mayor two (2) 

members.[Joint Appendix at p. 4731] 

' 17 .  



abolition of the general public's role in the functioning of the statutorily required CAB 

significantly negates the Coney Island community’s ability to influence the provision of health 

services. 

Moreover, it is not the mere formal existence of the CABs that is of significance to the 

quality of the public health system, but rather the critical role they actually serve in insuring 

community input into the provision of health services by that system. Indeed, the CABs are 

currently carefully and thoughtfully designed. to insure extensive community input into a range of 

issues affecting the provision of health services by public hospitals within the City of New York. 

Through procedures drafted to insure community input into various hospitals' actions, the CABs 

serve as a valuable sonic to the public hospital system. CAB members must be 

representatives of the community served by the hospital. N.Y. Unconsol. Law §7384[subd. 11]. 

In order to insure the CABs have representation from individuals with a diversity of views and a 

wide range of experience, the members of a particular hospital's CABs must include 

representatives of the community that hospital serves, consumers of that hospital's services, and 

members of the Community Board in which that hospital is located. See HHC Policy and - 

Guidelines for Community Advisory Boards, Sec. II. (1992). The CAB has been conferred the 

following fights: 1) the right "to full discussion on issues deemed important by the CAB"; 2) the 

. right "to consult with sponsible eiicidls and outside authorities"; and 3) the right "to make 

specific rSCoTRiSAdzLnS to the sponsible officials." Id at Sec. LLE.© HHC guidelines 

additionally provide that each CAB shall "be made aware and given the opportunity to advise" 

- HHC hospitals on the following matters: 
1) The establishment of priorities in relationship to planning. 
2) The allocation of funds within the facility budget. 
3) The monitoring of the quality of services which patients receive and the systematic 

mechanism for reporting of problems which develop. 
4)  Area-wide planning through appropriate agency mechanisms. 

Id. at Sec. V.B. (1992). 

18  



The CABs, thus, provide a forum through which HHC hospitals can gather information 

from the public at large as well as those who utilize HHC services. Most importantly, perhaps, 

the CABs provide a formal mechanism through which HHC hospitals can not only assess trends 

in the pic health needs in the community, but also design policies to remedy gaps in the 

services they provide to the community. 

When, as here, Defendants attempt to delegate the functions of a public hospital to a 

private, for-profit corporation, and as a consequence damage the mechanism that the Legislature 

expressly created to ensure that the hospital considers the ongoing advice of the community that 

it serves, Defendants go beyond what the law allows. Additionally, the assessment of the needs 

of that community and the ‘shaping of the services that hospital provides suffer. A simple 

reading of the HHC statute makes it Sor that the Legislature considered it to be the public 

hospital system -- complete with fully functioning CABs -- that would serve the "essential public 

and governmental function" of providing critical health care services to the public and that the 

public would serve a central role in the provision of those services. Without the meaningful 

public participation envisioned by the Legislature, the community Coney Island Hospital now 

serves will have little, if any, real voice with respect to the policies of fe proposed private 

hospital. Defendants are hard-pressed to show how such an essential function can simply be 

, subcontracted away to a private entity, which is likely to be more accountable to its shareholders 

than to the community it serves. 

Le 

19  



CONCLUSION 

Defendants’ efforts to privatize Coney Island Hospital denies the community a voice - a | 

voice intended to be preserved by the Legislature. Their actions will deny the community its 

right to petition and seek redress through the Legislature, the protections afforded by HHC, as a 

public benefit corporation, and the mandated mechanism of the CABs. For the foregoing reasons 

the decisions of the Appellate Division's holding that HHC acted ultra vires should be affirmed. 

   
        

ARNOLD S. COHEN : ‘LOURDES I. S 
ARTHUR A. BAER NEW YORKTAWYERS FOR THE 
ALLISON BUSCH PUBLIC INTEREST 

‘QUEENS LEGAL SERVICES CORPORATION ~ 30 West 21st Street, 9th Floor 
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(71 $) 392-5646 

  

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