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SPATT v. NEW YORK

May 25, 1973

Chester SPATT, Plaintiff,
v.
The STATE OF NEW YORK et al., Defendants



The opinion of the court was delivered by: MANSFIELD

MANSFIELD, Circuit Judge.

On August 24, 1972, plaintiff, Chester Spatt, a resident of New York and a student at Princeton University, New Jersey, commenced this action by filing a pro se complaint requesting that a three-judge panel be convened, 28 U.S.C. §§ 2281, 2284, to declare unconstitutional New York Education Law § 602(5)(b) (McKinney's Consol. Laws, c. 16, 1972 Supp.). The latter statute restricts eligibility for payments of financial assistance pursuant to New York's Regents Scholarship Program to those otherwise eligible students who are "matriculated in a program of study approved by the regents in an institution situated in the state. . . ." (emphasis supplied). The complaint also seeks an injunction restraining the appropriate state officials from denying him certification and financial assistance as a Regents Scholarship winner merely because of his attendance at an out-of-state college.

Spatt took the competitive Regents Scholarship examination and achieved a score higher than the minimum necessary for a scholarship award. He contends that § 602(5)(b), which mandates refusal of financial assistance to him solely because he is attending an educational institution not situated in New York, denies him the equal protection of the laws and unconstitutionally burdens interstate commerce. The initial complaint named only the State of New York as a defendant. A subsequent amendment added the New York State Commissioner of Education, the Governor, the State Comptroller, and the State Department of Education.

 The complaint was initially dismissed by Judge Weinstein on December 8, 1972, for lack of substantiality of the constitutional questions raised and for failure to state a claim upon which relief can be granted. But on January 16, 1973, after receiving a memorandum from Spatt in support of a motion to vacate the dismissal, Judge Weinstein concluded that Spatt's pro se pleadings, taken together, could not be called insubstantial on their face. Thereupon he vacated the previous dismissal and granted the motion for the convening of a three-judge court. Subsequently defendants discovered that Spatt had instituted an action against the State of New York on May 1, 1972, in the State Court of Claims, Albany County, raising the same questions as are sought to be litigated here. On August 4, 1972, the Court of Claims, in a memorandum opinion by Judge Milton Alpert, dismissed his complaint. No appeal was ever taken, although § 24 of the Court of Claims Act (McKinney 1972 Supp.) provides for an appeal to the Appellate Division of the Supreme Court of the State of New York. Instead, before the time for appeal in the state courts had expired, id. § 25, Spatt filed his complaint in the present action. Defendants moved on March 29, 1973, to dismiss plaintiff's federal complaint on the ground of res judicata.

 Turning first to the question of whether the action must be dismissed on grounds of res judicata, we start with the general principle that when a party in the first instance chooses to submit his federal claims for decision by the state courts and has them decided there, he may not ignore an adverse decision and seek to relitigate them in a federal district court. England v. Louisiana State Board of Medical Examiners, 375 U.S. 411, 419, 84 S. Ct. 461, 11 L. Ed. 2d 440 (1964). *fn1" His remedy is to take his appeal through the state courts and perhaps ultimately to the Supreme Court. Applying this principle here, upon Spatt's failure, within the time prescribed by law, to appeal from the judgment of the Court of Claims, that judgment became final and conclusive as to the issues litigated and determined between the State and himself and those in privity with them. Wilson's Executor v. Deen, 121 U.S. 525, 7 S. Ct. 1004, 30 L. Ed. 980 (1887); see 1B J. Moore, Federal Practice Para. 0.416[1] at 2202, Para. 0.416[5] at 2305-06 (2d ed. 1965). *fn2" Disposition of the res judicata defense therefore depends upon what claims were adjudicated in the state action.

 Spatt's constitutional claims in the state court action are substantially the same as those raised here. *fn3" With respect to the State's defense that the Court of Claims lacked jurisdiction Judge Alpert, in his decision of August 4, 1972, concluded that the State had not waived its immunity with respect to the exercise of what he considered to be the governmental function of certifying scholarship recipients for the Regents Scholarships, and thus the Court of Claims lacked jurisdiction over the claim. See Court of Claims Act §§ 8, 9 (McKinney 1963); Gross v. State, 33 A.D. 2d 868, 306 N.Y.S. 2d 28 (Sup. Ct. 1969). He went on to state, however, that assuming the Court of Claims had jurisdiction over the claim it still had to be dismissed on the merits of the constitutional challenge because "the statutory requirement to have the Regents Scholarship used at a college located within the State of New York is . . . a valid legislative enactment."

 Thus, while Judge Alpert did find that there was no jurisdiction to hear the claim, he also considered the merits of the claim, which is the same claim as that sought to be raised here, and expressed his view that the merits of the claim should be resolved adversely to plaintiff.

 Since it was Spatt who asked the Court of Claims for relief, urging that it had jurisdiction, we might well conclude that his failure to appeal Judge Alpert's decision should preclude him from seeking a new initial determination in a federal district court. Cf. Angel v. Bullington, 330 U.S. 183, 67 S. Ct. 657, 91 L. Ed. 832 (1947) (diversity suit). The question of whether the Court of Claims did have jurisdiction to hear the claim is best presented to the state appellate courts. Normally a plaintiff would not be allowed to ignore the essentially alternative holding on the merits when an appeal is available in the state courts and seek a de novo determination in federal court of the merits of his constitutional claim. See Taylor v. New York City Transit Authority, 433 F.2d 665, 668 (2d Cir. 1970). On the other hand, a judgment rendered by a court lacking competency is void, even though the party against whom it is rendered does not object to the competency of the court. Restatement of Judgments § 7 (1942) and Comment d.

 Tempted as we are to rule that since Spatt urged and accepted the competency of the state court, which then stated its views as to the merits, he should exhaust the state appellate process before invoking federal jurisdiction, there are countervailing factors in the present case. Here the state court, rather than erroneously assuming or maintaining that it possessed jurisdiction, has unequivocally ruled that it lacks jurisdiction over the claim, which casts doubt upon the res judicata effect to be given to its expression as to the merits. *fn4" Cf. 1B J. Moore, supra, Para. 0.409[2] at 1021-22. Absent a showing that its jurisdictional ruling was erroneous, we would not be inclined to require a plaintiff in effect to reject that determination, even in a case where it is accompanied by a volunteered statement on the merits. Accordingly, although the matter is not free from doubt, we are prepared to accept at face value the state court's jurisdictional determination, especially since it will afford the pro se plaintiff a determination on the merits of his constitutional claims, which appear to us to be considerably less open to question than does the issue as to the res judicata effect of the Court of Claims opinion.

 Turning to the merits, Spatt's first contention is that it is a denial of equal protection for the State, acting pursuant to New York Education Law § 602(5)(b) (McKinney 1972 Supp.), to refuse financial assistance to Regents Scholarship winners who, like himself, attend out-of-state colleges, while granting such assistance to those winners who attend institutions located within New York State. This discrimination, Spatt contends, penalizes the exercise of the student's "fundamental" right to travel interstate and can be upheld only upon a showing that it is justified by a "compelling governmental interest," Shapiro v. Thompson, 394 U.S. 618, 634, 89 S. Ct. 1322, 22 L. Ed. 2d 600 (1969); Dunn v. Blumstein, 405 U.S. 330, 338-342, 92 S. Ct. 995, 31 L. Ed. 2d 274 (1972). We disagree.

 In Shapiro and Dunn the persons who had recently migrated to their new home states were denied, solely because of their interstate movement, benefits which longer term residents were afforded -- in the one case the very means of subsistence and in the other the fundamental right to vote. See also Keenan v. Board of Law Examiners, 317 F. Supp. 1350 (E.D.N.C. 1970) (3-judge court) (one-year durational residency requirement before an applicant could take the state bar examination unconstitutionally burdened the right to travel because it forced the applicant to give up his profession for a year solely because he had recently exercised his right to travel interstate). No such penalty is inherent in a state law which makes scholarship aid available only to a student attending college in that state. Although his eligibility for scholarship aid may give him an incentive to attend school where such financial assistance will be available, it represents but one of many factors considered by a student in selecting the college he wishes to attend. He remains free to migrate interstate to attend an institution elsewhere without loss of such basic fundamentals as the means for survival, his franchise, or his right to practice his chosen profession. Although he may not, if he attends an out-of-state college, avail himself of New York's Regents Scholarship assistance, he is not denied the right to seek similar assistance, to the extent that it is available, from the state or institution to which he travels. Indeed, Spatt himself is presently attending Princeton University. In short, New York's effort to attract scholarship winners to attend educational institutions located within its borders does not, in our view, impose a penalty or deprivation in any constitutional sense.

 For these reasons we believe that the Regents Scholarship restriction does not fall in the category of "penalties upon the exercise of the constitutional right of interstate travel." Shapiro v. Thompson, supra, 394 U.S. at 638 n. 21, 89 S. Ct. at 1333. Nor can it be contended that the strict scrutiny standard, requiring the showing of a compelling governmental interest to sustain the challenged classification, must be applied here on the ground that the classification may affect the right to an education. The Supreme Court has recently decided that the importance of a public elementary and secondary education is not alone sufficient to warrant the application of the stricter standard of review to school financing classifications, San Antonio Independent School District v. Rodriguez, 411 U.S. 1, 29-39, 93 S. Ct. 1278, 1295-1300, 36 L. Ed. 2d 16 (March 21, 1973). It follows that a classification affecting the location of a college where financial aid may be spent should not be subjected to the more stringent equal protection test.

 We are further satisfied that the classification here under review satisfies the "rational basis" test, whether it be expressed in least stringent terms, e.g., McGowan v. Maryland, 366 U.S. 420, 426, 81 S. Ct. 1101, 6 L. Ed. 2d 393 (1961), or according to the relatively stricter version indicated by some recent Supreme Court decisions. *fn5" The record here reveals that the statutory distinction between in-state and out-of-state college attendance bears a substantial relationship to the state's actual, legitimate purpose in alleviating the operating costs of New York schools while at the same time providing financial assistance to certain qualified students to encourage them to seek a higher education. Thus the statutory classification withstands any standard of review short of the "strict scrutiny" test.

 The Regents Scholarship Program was first established in 1913 at a time when many western states had developed publicly supported state universities. New York already possessed a number of privately supported institutions and decided to use them to foster more open access to higher education in New York by providing through the scholarship awards a financial alternative to free-tuition public colleges in other states. See Freedom to Pursue a College Education: Recommendations by the State Board of Regents for Modifying and Extending New York State's Student Financial Aid Program 16 (1967). The scholarship program continues despite the development of a low-tuition state university system, and it has been suggested that the in-state restriction be retained, though arguments to the contrary have been recognized, because "the purpose of the ...


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