April 16, 2019

Standing to challenge the appointing authority's decision finalizing a disciplinary action taken against an employee

Certain residents and taxpayers of the Village [Plaintiffs] commenced a CPLR Article 78 proceeding seeking a court order annulling a resolution adopted by the Village's Board of Trustees [Board] approving, by a three-to-two vote, a modified disciplinary settlement agreement entered into by the Village and an employee of the Village.

The Plaintiffs, among other things, alleged that the Board's action violated the Village's Code of Ethics as one of the Board members who voted in favor of the resolution was the employee's brother-in-law. The Village and the employee separately moved to dismiss the Plaintiffs' Article 78 petition on various grounds, including lack of standing.

Supreme Court granted those branches of the separate motions of the Village and the employee seeking to dismiss the proceeding for lack of standing, thus denying the petition and dismissing the proceeding. The Plaintiffs appealed.

The Appellate Division said it agreed with the lower court's ruling, explaining:

1. Plaintiffs "effectively concede" that they are unable to show the existence of an injury in fact; and

2. Plaintiffs "do not qualify for common-law taxpayer standing."

The Doctrine of "Common-Law Taxpayer Standing" referred to by the Appellate Division was considered by the Court of Appeal in its decision in Matter of Transactive Corp. v New York State Dept. of Social Servs., 92 NY2d 579.  The Transactive court  noted "it is one thing to have standing to correct clear illegality of official action and quite another to have standing in order to interpose litigating plaintiffs and the courts into the management and operation of public enterprises."

As the Court of Appeals explained in Colella v Bd. of Assessors, 95 NY2d 401, it fashioned a remedy for taxpayers to challenge important governmental actions, despite such parties being otherwise insufficiently interested for standing purposes, when "the failure to accord such standing would be in effect to erect an impenetrable barrier to any judicial scrutiny of legislative action." The Doctrine, opined the court, should not be applied, however, to permit challenges to the determinations of local governmental officials having no appreciable public significance beyond the immediately affected parties, by persons having only the remotest legitimate interest in the matter.

Citing General Municipal Law §51, which provides for the prosecution of municipal officers for illegal acts, the Court of Appeals commented that its position with respect to the Doctrine of Common Law Taxpayer Standing is reinforced by the fact that "the Legislature has seen fit to confer general taxpayer standing to challenge the actions of local governmental officials in only limited situations."

The decision is posted on the Internet at: