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April 26, 1977

MOBIL OIL CORPORATION and William A. Davis, Plaintiffs,
Louis J. LEFKOWITZ, Attorney General of the State of New York, Defendant

The opinion of the court was delivered by: MOTLEY



 Plaintiff Mobil Oil Corporation (Mobil) is a New York Corporation which sells petroleum and various other products to private and public customers -- including New York governmental entities.

 Plaintiff, William A. Davis (Davis) (now deceased) was an employee of Mobil. On April 23, 1974 Davis was subpoenaed to testify before a special grand jury in New York County which was investigating "certain practices with respect to public bidding for contracts for gasoline and diesel fuel . . . ." (Lefkowitz letter). Upon entering the jury room on April 30, 1974, Davis was asked to sign a waiver of immunity so that the answers he gave to the grand jury could be later used against him. Davis refused to sign the waiver and proceeded to answer the grand jury's questions under the obligatory statutory grant of immunity. N.Y.C.P.L. § 190.40.

 After Davis had refused to waive immunity, Louis J. Lefkowitz, the defendant and Attorney General of the State of New York, proceeded to mail the letter, attached hereto as an appendix, and which is at issue in this case to various officials throughout New York State on August 29, 1974. *fn1" The letter purported to be mailed pursuant to N.Y. General Municipal Law Section 103-b (fully set forth in the margin). *fn2" This law provides that if a person called before a grand jury investigating contracts with the state or its political subdivisions refuses to waive immunity, this person "and any firm, partnership or corporation of which he is a member, partner, director or officer shall be disqualified from thereafter selling to or submitting bids to or receiving awards from or entering into any contracts with any municipal corporation [and other specified governmental entities] for a period of five years . . . ."

 The letter noted Davis' refusal to waive immunity, the fact that Davis worked for Mobil, and that Mobil is now accordingly disqualified from entering into any more contracts with the State. According to Lefkowitz' interpretation of §§ 103-a and 103-b, Davis is an "officer" or "member" of Mobil. The letter further suggests that §§ 103-a and 103-b are still viable statutes as applied to corporations despite the fact that the Supreme Court invalidated these statutes as they applied to the disqualification of individuals from entering into contracts after they had refused to waive their immunity. Lefkowitz v. Turley, 414 U.S. 70, 38 L. Ed. 2d 274, 94 S. Ct. 316 (1973).

 The complaint asserts four causes of action to support its prayer for a declaratory judgment, injunctive relief and damages: 1) Both plaintiffs claim that §§ 103-a and 103-b are no longer viable statutes since they were declared unconstitutional as a whole in Turley and not only as applied to individuals; 2) Mobil alone asserts that even if Turley did not completely invalidate the statutes, they are unconstitutional as applied to corporations since they violate the Fourteenth Amendment; 3) Mobil also claims that the letter was illegal under state law because Davis is not an "officer" or "member" of Mobil; and 4) Davis claims that the statutes are unconstitutional since the disqualification of Mobil will directly harm him and violate his Fifth and Fourteenth Amendment rights. *fn3"

 Mobil and Davis filed a motion for summary judgment under Rule 56, Fed. R. Civ. P., on their First cause of action, and Mobil has moved for summary judgment on its Third cause of action. Davis has died since this action was filed, and only Mobil's claims remain for consideration.3a Lefkowitz has filed a cross motion for summary judgment, or, in the alternative, judgment on the pleadings, Rule 12(c) Fed. R. Civ. P., on the grounds that 1) there is no case or controversy; 2) he is immune from money damages under 42 U.S.C. § 1983; and 3) Davis has no standing to sue. (This last ground is, of course, moot.) The court concludes that there is no genuine issue as to any material fact and that the case is ripe for summary judgment and judgment on the pleadings.

 In defendant's opening parry, he asserts that there is no case or controversy to support this court's jurisdiction. Noting that the courts will refuse to adjudicate an abstract or academic dispute, Lefkowitz argues that this is such a case. At the time of the suit (September 19, 1974) all public bidding for petroleum, even in connection with purchases by government agencies, had been suspended by the Emergency Petroleum Allocation Act of 1973 (EPAA) and the regulations promulgated thereunder. Title 15 U.S.C. §§ 751 et seq.; 10 C.F.R. Parts 210 and 211, Federal Energy Administration Ruling 1974-19 (Federal Energy Guidelines, para. 16,029). Since there was no more public bidding, says Lefkowitz, Mobil could not be harmed by a letter which suggested that Mobil ought to be excluded from such bidding. In fact, Lefkowitz adds that the letter was just that: only a "suggestion" or an "opinion" which the recipients were free to ignore or to follow. Any harm which Mobil might suffer, concluded defendant, is purely speculative since it depends on the willingness of Congress to let the EPAA expire and on the willingness of local officials to follow the Attorney General's "opinion" letter.

 The Supreme Court has discussed the nature of a "case" or "controversy" on numerous occasions. In Aetna Life Insurance Co. v. Haworth, 300 U.S. 227, 240-41, 81 L. Ed. 617, 57 S. Ct. 461 (1937), Chief Justice Hughes defined "controversy" as follows:

"A 'controversy' in this sense must be one that is appropriate for judicial determination. A justiciable controversy is thus distinguished from a difference or dispute of a hypothetical or abstract character from one that is academic or moot. The controversy must be definite and concrete, touching the legal relations of parties having adverse legal interests. It must be a real and substantial controversy admitting of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts." (Citations omitted.)

 Certainly the posture of this case presents a controversy in the sense that there are clearly defined issues upon which specific relief can be granted. The Attorney General has sent a letter to numerous persons suggesting that Mobil is no longer eligible to participate in public bidding. Mobil claims that the letter was not sent in accordance with the statute and that, in any case, the statute has been declared unconstitutional. The relief could take many discreet forms, such as requiring the Attorney General to send a second letter retracting the first.

 This is not a case where the Attorney General is threatening, perhaps " unjustifiably", to send the disputed letter upon a future contingency, cf. Eccles v. Peoples Bank, 333 U.S. 426, 92 L. Ed. 784, 68 S. Ct. 641 (1948), or where the plaintiff asserts illegal governmental acts but has not been himself affected, O'Shea v. Littleton, 414 U.S. 488, 38 L. Ed. 2d 674, 94 S. Ct. 669 (1974), Danville Tobacco Association v. Freeman, 122 U.S. App. D.C. 135, 351 F.2d 832 (1965). Rather, the letter has already been sent, and Mobil claims that this action, which was directed specifically at it, was unlawful.

 Citing O'Shea, supra, at 498, Lefkowitz argues that "the threat of injury from the alleged course of conduct they attack is simply too remote to satisfy the case-or-controversy requirement and permit adjudication by a federal court." *fn4" When Mobil's motion for summary judgment was first filed, public bidding for petroleum products had been suspended in New York by the EPAA. However, even under that act, the regulations promulgated pursuant thereto did not suspend public bidding on amounts of petroleum products less than 84,000 gallons, *fn5" title 11 C.F.R. § 211.51 ("wholesale purchaser-consumer"), or on amounts of surplus petroleum. Title 10 C.F.R. § 211.10(g), F.E.A. Ruling 1974-19. In any case, public bidding could resume if both the buyer and seller of petroleum mutually agreed to terminate the relationship. 10 C.F.R. § 211.9(a)(2)(ii). Furthermore, while this motion has been pending, essentially all petroleum products, except gasoline, have been exempted from the allocation regulations. Title 11 C.F.R. § 210.35.

 Lefkowitz sent the letter pursuant to § 103-b with the goal of encouraging the disqualification of Mobil from contracting with the governmental entities of New York State. *fn6" Mobil need not wait until it can prove that it was not awarded a contract because this letter was mailed. The mere existence of this letter is certainly enough to encourage state officials to exclude Mobil from bidding on their contracts. Defendant can not mail such a letter -- with the clear intent of affecting Mobil's business in the State -- and then plead that there is no case or controversy to resolve. "The challenged governmental activity in the present case is not contingent, has not evaporated or disappeared, and, by its continuing and brooding presence, casts what may well be a substantial adverse effect on the interests of the petitioning parties." Super Tire Engineering Co. v. McCorkle, 416 U.S. 115, 122, 40 L. Ed. 2d 1, 94 S. Ct. 1694 (1974).

 On the merits, Mobil's first claim is that §§ 103-a and 103-b had previously been declared unconstitutional by the Supreme Court. In the letter itself, Lefkowitz anticipated this argument: "While there may be various interpretations of the effect of the Turley case, it is the opinion of my office that the case does not invalidate the statute [§ 103-b] as applied to corporations." This court agrees with Lefkowitz, but now holds that the entire statute is unconstitutional since its sections are not severable; the corporate penalties must fall if the individual sanctions are stricken. *fn7"

 In Campbell Painting Corp. v. Reid, 392 U.S. 286, 20 L. Ed. 2d 1094, 88 S. Ct. 1978 (1968), the Court held that a corporation could be prohibited from contracting with the public authorities of New York under the Public Authorities Law § 2601, the analog of General Municipal Law § 103-a. In Campbell, the plaintiff's president refused to sign a waiver of immunity before the grand jury, and the N.Y. City Housing Authority notified plaintiff that its contracts with the Authority were being terminated. The Court did not affirmatively rule that § 2601 was constitutional but said that the corporation-plaintiff could not claim that its president's Fifth Amendment right against self-incrimination was being violated since "it has long been settled in federal jurisprudence that the constitutional privilege against self-incrimination is 'essentially a personal one, applying only to natural individuals.' It 'cannot be utilized by or on behalf of any organization, such as a corporation' (citations omitted)." 392 U.S. at 288-89.

 While Campbell focused on the disqualification of a corporation, the three-judge court in Turley v. Lefkowitz, 342 F. Supp. 544 (W.D.N.Y. 1972) was faced with the question whether licensed architects who had been employed by various municipalities and state and county agencies could be disqualified under §§ 2601, 2602, 103-a and 103-b for refusing to sign waivers of immunity before the grand jury. The court relied on a string of Supreme Court cases which held that individual employees could not be faced with the Hobson's choice of deciding whether to waive immunity or forfeit their job. The court did not discuss Campbell or the disqualification of corporations and concluded with the following:

"Quite clearly, then, the plaintiffs' disqualification from public contracting for five years as a penalty for asserting a constitutional privilege is violative of their Fifth Amendment rights. Equally clear is that, within the proper limits, public employees are not immune from being compelled to account for their official actions in order to keep their jobs. Until rewritten so as to comply with constitutional standards, Sections 103-a and 103-b of New York's General Municipal Law and Sections 2501 and 2602 of the New York Public Authorities Law are unconstitutional, and the defendants are enjoined from their further enforcement. So ordered." 342 F. Supp. at 549.

 The Supreme Court affirmed the judgment of the District Court in Lefkowitz v. Turley, 414 U.S. 70, 38 L. Ed. 2d 274, 94 S. Ct. 316 (1973). *fn8"

 Mobil bases its claim that §§ 103-a and 103-b are unconstitutional on two alternative grounds. First, Mobil claims that Campbell was implicitly overruled by Turley arguing that, unlike Campbell, Turley accepts the reasoning that by punishing a corporation for an individual's assertion of his Fifth Amendment rights, the individual, himself, may be injured and his Fifth Amendment privilege compromised if his corporation is disqualified from contracting with the State. Second, Mobil claims that even if Campbell has not been overruled, Turley has declared the whole of §§ 103-a and 103-b unconstitutional. We need not consider the first argument, since this court finds that although the three-judge Turley court did not consider the constitutionality of §§ 103-a and 103-b as applied to corporations, the entire statutes must stand or fall as a whole, and thus the statutes are unconstitutional as applied to corporations as well as individuals.

 The three-judge court in Turley did not consider the question whether §§ 103-a and 103-b are severable such that the corporate penalties could survive the unconstitutionality of the individual ones. Therefore, this court finds that opinion did not enjoin the Attorney General from enforcing the corporate sanctions of these statutes. *fn9" The question to be decided is whether §§ 103-a and 103-b are ...

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