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In re Brennan Center For Justice At NYU School of Law

Supreme Court of New York, Third Department

March 29, 2018

In the Matter of BRENNAN CENTER FOR JUSTICE AT NYU SCHOOL OF LAW et al., Appellants,
v.
NEW YORK STATE BOARD OF ELECTIONS, Respondent.

          Emery Celli Brincherhoff & Abady LLP, New York City (Elizabeth S. Saylor of counsel) and Wendy R. Weiser, Brennan Center for Justice at NYU School of Law, New York City, for appellants.

          William J. McCann Jr., New York State Board of Elections, Albany, for respondent.

          Before: Garry, P.J., McCarthy, Egan Jr., Lynch and Pritzker, JJ.

          MEMORANDUM AND ORDER

          Garry, P.J.

         Appeal from a judgment of the Supreme Court (Ferreira, J.), entered March 3, 2017 in Albany County, which dismissed petitioners' application, in a combined proceeding pursuant to CPLR article 78 and action for declaratory judgment, to review a determination of respondent denying a request to rescind and replace respondent's 1996 Opinion No. 1.

         Respondent is a bipartisan agency governed by four appointed commissioners and vested with the statutory authority to issue instructions, rules and regulations pertaining to campaign financing practices, among other things (see Election Law §§ 3-100 [1]; 3-102 [1]). When the creation of limited liability companies (hereinafter LLCs) was first statutorily authorized in New York in 1994, the Legislature did not amend the Election Law to establish campaign contribution limits for the new entities like those that had already been established for partnerships and corporations. Respondent thereafter resolved the question of the applicable limits by issuing 1996 Opinion No. 1 (hereinafter the 1996 opinion), which opined that treatment of an LLC as a corporation or a partnership was precluded by the statutory definition of an LLC as "an unincorporated organization... other than a partnership or trust" (Limited Liability Company Law § 102 [m] [emphasis added]). Respondent determined that LLCs should be treated as persons for this purpose and were thus subject to the contribution limits that apply to individuals under Election Law article 14.

         As the statutory contribution limits imposed upon partnerships and corporations are lower than those imposed upon individuals, the 1996 opinion permits LLCs to make significantly larger political contributions than those allowed for other business entities - a controversial result known as the "LLC Loophole." Critics assert that LLCs have acquired disproportionate political influence that has significantly impaired the quality and integrity of governance. Legislative efforts since 1996 to close the LLC Loophole and impose lower contribution limits upon LLCs have not succeeded.

         In April 2015, one of respondent's commissioners made a motion for respondent to direct its counsel to prepare an opinion that would rescind the 1996 opinion and provide updated guidance on the applicability of the Election Law's contribution limits to LLCs. The motion failed when two of the four commissioners voted against it (see Election Law § 3-100 [1], [4]). Petitioner Brennan Center for Justice at NYU School of Law and six individuals sought review in a combined CPLR article 78 proceeding and action for a declaratory judgment. Supreme Court (Fisher, J.) dismissed the petition/complaint in its entirety and, upon appeal, this Court affirms said dismissal (Matter of Brennan Law Ctr. for Justice at NYU School of Law v New York State Bd. of Elections, ___ A.D.3d ___ [appeal No. 524905, decided herewith]).

         In April 2016, one of respondent's commissioners put forth a new motion seeking the approval of a proposed draft opinion that would rescind and replace the 1996 opinion and find that LLCs should be treated as partnerships or corporations under the Election Law. As before, the motion failed when two commissioners voted against it. Petitioners commenced this combined CPLR article 78 proceeding and action for a declaratory judgment seeking, among other things, a judgment invalidating respondent's April 2016 decision and adopting the proposed opinion. Supreme Court (Ferreira, J.) dismissed the petition/complaint, determining that the matter presents a nonjusticiable political question, among other things. Petitioners appeal.

         The general principle of justiciability embraces several concepts - including standing and the nonjusticiability of political questions, among others - that are related by the fundamental tenet that, in our tripartite system of government, a court should limit itself to conflicts that are amenable to traditional judicial resolution and should "not undertake tasks that the other [governmental] branches are better suited to perform" (Klostermann v Cuomo, 61 N.Y.2d 525, 535 [1984]; see Jones v Beame, 45 N.Y.2d 402, 408 [1978]; Roberts v Health & Hosps. Corp., 87 A.D.3d 311, 323 [2011], lv denied 17 N.Y.3d 717 [2011]; see also Flast v Cohen, 392 U.S. 83, 95 [1968]). This matter raises interrelated issues of justiciability as to whether a court is the appropriate forum for the determination of petitioners' contentions. Despite the importance of the underlying issues, we agree with Supreme Court that this matter is not justiciable. We reach this conclusion both because petitioners lack standing and for the closely-related, and more significant, reason that the issues they raise are nonjusticiable political questions.

         Essentially, petitioners ask this Court to direct respondent to rescind its 1996 opinion on the LLC Loophole and replace it with one that would provide what they assert to be a superior application of public policy. We may not grant this request without violating the vital principle of the separation of powers. That principle dictates that each branch of government "should be free from interference, in the lawful discharge of duties expressly conferred, by either of the other branches" (Matter of New York State Inspection, Sec. & Law Enforcement Empls., Dist. Council 82, AFSCME, AFL-CIO v Cuomo, 64 N.Y.2d 233, 239 [1984]; accord Roberts v Health & Hosps. Corp., 87 A.D.3d at 324). Here, the Legislature has conferred the authority to make directions pertaining to campaign financing practices upon respondent (see Election Law § 3-102 [1]). This Court cannot disturb respondent's lawful directions with regard to LLCs without interfering with "policy-making and discretionary decisions that are reserved to the legislative and executive branches" (Klostermann v Cuomo, 61 N.Y.2d at 541; accord Campaign for Fiscal Equity, Inc. v State of New York, 8 N.Y.3d 14, 28 [2006]) [1]. The important issues raised here involve matters of discretion and policy that have been expressly entrusted to another branch of government and are "beyond the scope of judicial correction" (Jones v Beame, 45 N.Y.2d at 408; see Matter of New York State Inspection, Sec. & Law Enforcement Empls., Dist. Council 82, AFSCME, AFL-CIO v Cuomo, 64 N.Y.2d at 239-240; Klostermann v Cuomo, 61 N.Y.2d at 535; Matter of Schulz v Silver, 212 A.D.2d 293, 295 [1995], appeal dismissed 86 N.Y.2d 835');">86 N.Y.2d 835 [1995], lv dismissed and denied 87 N.Y.2d 916');">87 N.Y.2d 916 [1996]. [2]

         The nonjusticiable nature of this controversy is closely interconnected with the question of petitioners' standing to pursue this matter - "an aspect of justiciability which, when challenged, must be considered at the outset of any litigation" (Society of Plastics Indus. v County of Suffolk, 77 N.Y.2d 761, 769 [1991]). To establish standing, petitioners must show that they have suffered an injury-in-fact and that the injury is within the zone of interests protected by the statute at issue (see Matter of Association for a Better Long Is., Inc. v New York State Dept. of Envtl. Conservation, 23 N.Y.3d 1, 6 [2014]). Here, the dispute focuses upon the injury-in-fact element, which requires petitioners to establish that they have suffered or will suffer concrete harm that is "distinct from that of the general public" (Matter of Transactive Corp. v New York State Dept. of Social Servs., 92 N.Y.2d 579, 587 [1998]; see Matter of Graziano v County of Albany, 3 N.Y.3d 475, 482 [2004]; Schulz v Cuomo, 133 A.D.3d 945, 947 [2015], appeal dismissed 26 N.Y.3d 1139');">26 N.Y.3d 1139 [2016], lv denied 27 N.Y.3d 907');">27 N.Y.3d 907 [2016]).

         The six individual petitioners are current or former legislators or candidates for legislative office, and the Brennan Center describes itself as "a not-for-profit, non-partisan public policy and law institute that focuses on issues of democracy and justice." Petitioners contend persuasively that the detrimental political influence enjoyed by LLCs presents serious issues of "vital public concern, " but - by the application of binding precedent - this fact alone does not establish standing (Society of Plastics Indus. v County of Suffolk, 77 N.Y.2d at 769 [internal quotation marks omitted]). The individual petitioners claim that the LLC Loophole hampers their electoral campaigns by placing them at a competitive disadvantage against opponents who receive larger contributions, damages their ability to represent their constituents, and harms them as voters and citizens by, among other things, limiting their choices among candidates and hiding the identity of donors. These claimed injuries as voters and citizens are common to all community members, and the political injuries are likewise common to all candidates, who are equally free to seek or reject LLC contributions under the 1996 opinion. Thus, the individual petitioners' injuries are not "different or distinct from [those] of the public at large" (Schulz v Cuomo, 133 A.D.3d at 947; see Matter of Transactive Corp. v New York State Dept. of Social Servs., 92 N.Y.2d at 587; Lancaster Dev., Inc. v McDonald, 112 A.D.3d 1260, 1261-1262 [2013], lv denied 22 N.Y.3d 866');">22 N.Y.3d 866 [2014]; Matter of Diederich v St. Lawrence, 78 A.D.3d 1290, 1291-1292 [2010], lv dismissed and appeal dismissed 17 N.Y.3d 782');">17 N.Y.3d 782 [2011]).

         Certain individual petitioners assert that they may suffer competitive disadvantages in future electoral campaigns as a result of the LLC Loophole. This injury is conjectural and, therefore, does not operate to establish standing (see New York State Assn. of Nurse Anesthetists v Novello, 2 N.Y.3d 207, 214-215 [2004]; Schulz v Cuomo, 133 A.D.3d at 947; Matter of Town of E. Hampton v State of New York, 263 A.D.2d 94, 96 [1999]) [3]. Nor has the Brennan Center established organizational standing (see generally Matter of Dental Socy. of State of N.Y. v Carey, 61 N.Y.2d 330, 333-334 [1984]). Its assertion that the LLC Loophole harms its staff contributors and volunteers by limiting their candidate choices and unduly influencing their political representatives does not allege harm that differs from that suffered by the general public and, thus, does not establish "that at least one of its members would have standing to sue" (New York State Assn. of Nurse Anesthetists v Novello, 2 N.Y.3d at 211; see Rudder v Pataki, 93 N.Y.2d 273, 278-280 [1999]; Matter of Citizens Emergency Comm. to Preserve Preserv. v Tierney, 70 A.D.3d 576, 576-577 [2010], lv denied 15 N.Y.3d 710 [2010]) [4]. We find no merit in the Brennan Center's further claim that it was injured ...


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