World Trade Ctr. Lower Manhattan Disaster Site Litig. Stanislaw Faltynowicz v. Battery Park City Auth. , 892 F.3d 108 ( 2018 )

15-2181-cv(L)
In re: World Trade Center Lower Manhattan Disaster Site Litigation
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term, 2016
Argued: October 5, 2016
Questions Certified: January 19, 2017
Certified Questions Answered: November 21, 2017
Supplemental Briefing Concluded: April 25, 2018
Decided: June 6, 2018
Nos. 15-2181-cv(L), 15-2283-cv(Con), 15-2285-cv(Con),
15-2487-cv(Con), 15-2506-cv(Con), 15-2687-cv(Con)
IN RE: WORLD TRADE CENTER
LOWER MANHATTAN DISASTER SITE LITIGATION
STANISLAW FALTYNOWICZ, LUCYNA FOREMSKA, RUBEN ACOSTA, VLADMIR
AKOULOV, WALDEMAR BALCER, JOAQUIN CAMPUZANO, HENRYK CIBOROWSKI, JAN
DOBROWOLSKI, MAREK GLOWATY, EUGENIUSZ JASTRZEBOWSKI, ZBIGNIEW
KUCHARSKI, MARIA MORENO, IRENA PERZYNASKA, MARIAN RETELSKI, DARIUSZ
WSZOLKOWSKI, BOGUSLAW ZALEWSKI,
Plaintiffs-Appellants,
STATE OF NEW YORK,
Intervenor-Appellant,
— v. —
BATTERY PARK CITY AUTHORITY, ET AL.,
Defendants-Appellees.
SANTIAGO ALVEAR,
Plaintiff-Appellant,
STATE OF NEW YORK,
Intervenor-Appellant,
— v. —
BATTERY PARK CITY AUTHORITY,
Defendant-Appellee.
PETER CURLEY, MARY ANN CURLEY,
Plaintiffs-Appellants,
STATE OF NEW YORK,
Intervenor-Appellant,
— v. —
BATTERY PARK CITY AUTHORITY,
Defendant-Appellee.
B e f o r e:
LYNCH and DRONEY, Circuit Judges, and REISS, District Judge.*
*
Judge Christina Reiss, of the United States District Court for the District of
Vermont, sitting by designation.
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Plaintiffs brought tort and labor law claims against defendant-appellee
Battery Park City Authority after their participation in post-9/11 cleanup efforts
at sites defendant owns allegedly caused them to develop respiratory illnesses.
The United States District Court for the Southern District of New York (Alvin K.
Hellerstein, J.) granted summary judgment against plaintiffs on the ground that
the New York law that had revived their otherwise time-barred claims was
unconstitutional. Plaintiffs argue that New York’s capacity-to-sue rule bars a
public corporation like defendant from raising a constitutional challenge to state
legislation, and that defendant’s challenge fails on the merits. After certifying two
questions to the New York Court of Appeals and receiving answers to those
questions, we VACATE and REMAND.
Supplemental briefing submitted by:
Gregory J. Cannata, Gregory J. Cannata & Associates, LLP, New
York, NY, for Plaintiffs-Appellants Stanislaw Faltynowicz,
Lucyna Foremska, Ruben Acosta, Vladmir Akoulov,
Waldemar Balcer, Joaquin Campuzano, Henryk Ciborowski,
Jan Dobrowolski, Marek Glowaty, Eugeniusz Jastrzebowski,
Zbigniew Kucharski, Maria Moreno, Irena Perzynaska, Marian
Retelski, Dariusz Wszolkowski, Boguslaw Zalewski.
Paul J. Napoli, Napoli Shkolnik PLLC, New York, NY, for Plaintiffs-
Appellants Santiago Alvear, Peter Curley, Mary Ann Curley.
Steven C. Wu, Deputy Solicitor General, Eric Del Pozo, Assistant
Solicitor General, Andrew W. Amend, Senior Assistant
Solicitor General, for Barbara D. Underwood, Acting Attorney
General for the State of New York, New York, NY, for
Intervenor-Appellant State of New York.
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Daniel S. Connolly, Bracewell LLP, New York, NY, for Defendant-
Appellee Battery Park City Authority.
PER CURIAM:
This action involves the tort and labor law claims of workers whose
participation in post-9/11 cleanup efforts allegedly caused them to develop
respiratory illnesses. The United States District Court for the Southern District of
New York (Alvin K. Hellerstein, J.) granted summary judgment against the
workers, holding that the law that had revived their otherwise time-barred
claims was unconstitutional under the New York State Constitution. We
previously certified to the New York Court of Appeals (“NYCOA”) two
questions implicated by this consolidated appeal. The NYCOA having answered,
we now VACATE and REMAND.
BACKGROUND
Plaintiffs are eighteen workers who claim to have developed respiratory
illnesses as a result of their participation in the cleanup efforts following the
terrorist attacks of September 11, 2001. They sued defendant Battery Park City
Authority (“BPCA”), a public corporation created by the New York Legislature,
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see N.Y. Pub. Auth. Law § 1971, which owns several of the sites where plaintiffs
worked and which allegedly failed to ensure plaintiffs’ and other workers’ safety.
The district court dismissed plaintiffs’ original suits, as well as hundreds of
similar ones, for failing to serve timely notices of claim on BPCA and other public
entities named as defendants. See N.Y. Gen. Mun. Law § 50-e(1)(a) (“In any case
founded upon tort where a notice of claim is required by law as a condition
precedent to the commencement of an action or special proceeding against a
public corporation, . . . the notice of claim shall comply with and be served in
accordance with the provisions of this section within ninety days after the claim
arises . . . .”).
The New York State Legislature responded to that rash of dismissals by
passing “Jimmy Nolan’s Law,” N.Y. Gen. Mun. Law § 50-i(4)(a), which revived
“for one year all time-barred claims against public corporations for personal
injuries sustained by workers who participated in post-9/11 rescue, recovery, or
cleanup efforts.” In re World Trade Ctr. Lower Manhattan Disaster Site Litig., 846
F.3d 58, 62 (2d Cir. 2017). Plaintiffs thereafter refiled their claims against BPCA.
BPCA sought and obtained summary judgment on plaintiffs’ claims on the
ground that Jimmy Nolan’s Law was unconstitutional under the New York State
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Constitution. Plaintiffs appealed the district court’s decision to this Court,
arguing that New York’s capacity-to-sue rule, under which “municipalities and
other local governmental corporate entities and their officers lack capacity to
mount constitutional challenges to acts of the State and State legislation,” City of
New York v. State of New York, 86 N.Y.2d 286, 289 (1995), barred a public
corporation like BPCA from challenging the constitutionality of state legislation
and, in any event, that BPCA’s challenge failed on the merits.
Finding an “absence of authoritative guidance” on the standards we
should use to evaluate plaintiffs’ arguments, In re World Trade Ctr., 846 F.3d at 69,
we certified two questions to the NYCOA:
(1) Before New York State’s capacity-to-sue doctrine
may be applied to determine whether a State-
created public benefit corporation has the capacity to
challenge a State statute, must it first be determined
whether the public benefit corporation “should be
treated like the State,” see Clark–Fitzpatrick, Inc. v. Long
Island R.R. Co., 516 N.E.2d 190, 192 (N.Y. 1987), based on
a “particularized inquiry into the nature of the
instrumentality and the statute claimed to be applicable
to it,” see John Grace & Co. v. State Univ. Constr. Fund, 375
N.E.2d 377, 379 (N.Y. 1978), and if so, what
considerations are relevant to that inquiry?; and
(2) Does the “serious injustice” standard articulated
in Gallewski v. H. Hentz & Co., 93 N.E.2d 620 (N.Y. 1950),
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or the less stringent “reasonableness” standard
articulated in Robinson v. Robins Dry Dock & Repair Co.,
144 N.E. 579 (N.Y. 1924), govern the merits of a due
process challenge under the New York State
Constitution to a claim-revival statute?
In re World Trade Ctr., 846 F.3d at 60–61 (brackets and alterations omitted).
The NYCOA has now responded. The Court answered the first question
that “no ‘particularlized inquiry’ is necessary to determine whether public benefit
corporations should be treated like the State for purposes of capacity.” Matter of
World Trade Ctr. Lower Manhattan Disaster Site Litig., 30 N.Y.3d 377, 383 (2017). As
a result, a public benefit corporation is treated like any other state entity and is
subject to the “general rule” that “state entities lack capacity to challenge the
constitutionality of a state statute,” with only a few “narrow” exceptions. Id. at
383, 387.
The Court reformulated the second question to ask “[u]nder Robinson and
Gallewski, what standard of review governs the merits of a New York State Due
Process Clause challenge to a claim-revival statute?” Id. at 394 (internal quotation
marks omitted). The Court then held that “a claim-revival statute will satisfy the
Due Process Clause of the State Constitution if it was enacted as a reasonable
response in order to remedy an injustice.” Id. at 400.
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Following supplemental briefing from the parties on the implications of the
NYCOA’s answers to the certified questions, this appeal is ripe for resolution.
DISCUSSION
The NYCOA’s decision makes clear that BPCA, like any other state entity,
may challenge the constitutionality of Jimmy Nolan’s Law only if it qualifies for
one of the “narrow” exceptions to the capacity-to-sue rule. Id. at 387. For the
reasons that follow, we conclude that no such exception applies and thus vacate
the decision of the district court.
BPCA claims that it qualifies for the proprietary-interest exception, which
permits a state entity to challenge the constitutionality of “State legislation [that]
adversely affects a municipality’s proprietary interest in a specific fund of
moneys.” City of New York v. State, 86 N.Y.2d 286, 291–92 (1995). BPCA’s theory is
that by allowing plaintiffs’ suits to proceed, Jimmy Nolan’s Law potentially
exposes BPCA to liability that would require payment from BPCA’s general fund
in satisfaction of a court judgment. That theory does not fit the “narrow”
exception that the NYCOA has described. See Matter of World Trade Ctr., 30
N.Y.3d at 387.
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Two cases serve as helpful guideposts in assessing the applicability of the
exception. In the first, Gulotta v. State, three New York counties and their county
executives brought an action challenging “the system of State mandates,” which
consisted of “various laws which require[d] the [c]ounties to make
expenditures.” 645 N.Y.S.2d 41, 42 (2d Dep’t 1996). The New York Supreme
Court ruled that the plaintiffs had the capacity to sue, but the Appellate Division
disagreed. Id. The Appellate Division recognized that “municipalities and other
local governmental corporate entities and their officers lack the capacity to mount
constitutional challenges” to state legislation, and expressly held — despite the
fact that the laws at issue required county expenditures — that the proprietary-
interest exception did not apply. Id. at 42–43. In “stress[ing]” the narrowness of
the exceptions to the capacity-to-sue rule in Matter of World Trade Center, the New
York Court of Appeals cited that holding as authoritative. 30 N.Y.3d at 387.
The second case, and the principal case on which BPCA relies, is County of
Rensselaer v. Regan, 80 N.Y.2d 988 (1992). In 1981, the New York State Legislature
enacted the “‘special traffic options program for driving while intoxicated’
(STOP-DWI) whereby a participating county could receive fines and forfeitures
collected by courts within that county for alcohol-related driving offenses.” Id. at
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990. A decade later, the Legislature passed another law that diverted to the state
a percentage of the drunk driving funds to which participating counties were
entitled. Id. at 990–91. The plaintiff counties brought a constitutional challenge to
the new law, and the New York Court of Appeals held that their challenge could
be heard because, “STOP-DWI legislation having been neither amended nor
repealed, the participating counties ha[d] a proprietary claim to the fines and
forfeitures” to which the later legislation was directed. Id.
There may be cases that fall between Gulotta and Rensselaer, and potentially
present a close question on whether the proprietary-interest exception applies.
This is not one of them. Jimmy Nolan’s Law, at most, has an indirect effect on
BPCA’s general fund, making the present case an easier one than Gulotta, where
the challenged laws actually “require[d] the [c]ounties to make expenditures.”
645 N.Y.S.2d at 42. And Jimmy Nolan’s Law is easily distinguished from the law
at issue in Rensselaer. There, the allegedly unconstitutional law itself was aimed at
specific funds to which the counties were otherwise entitled. Here, by contrast,
the challenged law has nothing to do with any fund, let alone a specific one, and
simply removes a procedural obstacle to suits of a type to which BPCA is
regularly exposed.
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Indeed, if BPCA’s logic were followed, the proprietary-interest exception
would permit a public entity to challenge the constitutionality of any law that
could potentially expose it to greater liability, so long as the entity claimed that it
had some sort of fund from which a judgment might be paid. That would hardly
be a narrow exception to New York’s capacity-to-sue rule.
We have little difficulty concluding that, in this case, BPCA does not
qualify for any exception to the general rule that state entities lack the capacity to
raise constitutional challenges to state statutes, and its challenge to Jimmy
Nolan’s Law must therefore be rejected. Accordingly, we need not reach the
question whether that law is consistent with the Due Process Clause of the New
York State Constitution.
CONCLUSION
For the foregoing reasons, we VACATE the judgment of the district court
and REMAND the case for further proceedings.
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