author: Bellacosa, J. Smith, J.

text:
    In the Matter of Robert L. Schulz et al., Appellants, v State of New York et al., Respondents. In the Matter of Robert L. Schulz et al., Appellants, v State of New York et al., Respondents.
    Argued February 9, 1993;
    decided May 11, 1993

      POINTS OF COUNSEL

      Robert L. Schulz, John Salvador, Jr., Gilbert O. Boehm and William Busch, appellants pro se in the first above-entitled matter.
    I. The Act is expressly forbidden; the Legislature acted in defiance of constitutional restraints. (Sgaglione v Levitt, 37 NY2d 507.) II. Debt incurred under the Act is void, invalid and unenforceable between the parties. (People v Westchester County Natl. Bank, 231 NY 465; Wilkes County v Coler, 190 US 107; County of Bates v Winters, 97 US 83; School Dist. v Insurance Co., 103 US 707; Brenham v German Am. Bank, 144 US 173; Northern Bank v Porter Twp., 110 US 608; Nesbit v Riverside Ind. Dist., 144 US 610; Brownell v Town of Greenwich, 114 NY 518.) III. The Act violates article VII, §§ 8, 11 and article X, §5 of the State Constitution. (Marbury v Madison, 1 Crunch [5 US] 137; People ex rel. Burby v Howland, 155 NY 270; Sgaglione v Levitt, 37 NY2d 507; Flushing Natl. Bank v Municipal Assistance Corp., 40 NY2d 731.) IV. The Act and the bonds issued pursuant thereto are patently unconstitutional. (East N. Y. Sav. Bank v Hahn, 293 NY 622, 326 US 230.) V. The action being complained of is an absolute precedent. (Wein v State of New York, 39 NY2d 136.) VI. New York State Coalition for Criminal Justice v Coughlin (64 NY2d 660) helps appellants and offers no help to respondents. (Ofenlock v Gaynor, 66 Misc 2d 185, 35 AD2d 913; Boryszewski v Brydges, 37 NY2d 361; Wein v City of New York, 36 NY2d 610; Wein v Levitt, 42 NY2d 300.) VII. Appellants have standing: the exception in section 123-b (1) of the State Finance Law is "abrogated”. (Boryszewski v Brydges, 37 NY2d 361.) VIII. Appellants, as voters, have standing to maintain this action. (Wein v Comptroller of State of N. Y. 46 NY2d 394; New York State Coalition for Criminal Justice v Coughlin, 64 NY2d 660.) IX. Laches is no defense. (Locust Club v City of Rochester, 48 Misc 2d 763, 29 AD2d 134, 22 NY2d 802, 894, 393 US 381; Fiorile v Goldman, 24 Misc 2d 944; Bata v Bata, 279 App Div 182, 306 NY 96; Rock Hill Sewerage Disposal Corp. v Town of Thompson, 27 AD2d 626; Bohemian Brethren Presbyt. Church v Greek Archdiocesan Cathedral of Holy Trinity, 94 Misc 2d 841, 70 AD2d 538; Orange & Rockland Utils. v Philwold Estates, 70 AD2d 338, 52 NY2d 253; Weisz v Parke-Bernet Galleries, 67 Misc 2d 1077, 77 Misc 2d 80; Bliss v Omnibus Corp., 169 Misc 662; Prince Hall Grand Lodge F. & A. M. v Supreme Council, 32 Misc 2d 390; New York Pub. Interest Research Groups v Levitt, 62 AD2d 1074, 46 NY2d 849.) X. Appellants’ fundamental rights are being violated. (Murdock v Pennsylvania, 319 US 105; Douglas v Jeanette, 319 US 157; California Transp. v Trucking Unlimited, 404 US 508; Pizzolato v Perez, 524 F Supp 914; People v Siragusa, 81 Misc 2d 368; Wilmorite, Inc. v Eagan Real Estate, 454 F Supp 1124, 578 F2d 1372, 439 US 983; Morales v Turman, 326 F Supp 677; McLaughlin v Great Lakes Dredge & Dock Co., 495 F Supp 857; Parham v Hughes, 441 US 347; Ciechon v City of Chicago, 686 F2d 511.)

      Robert Abrams, Attorney-General, Albany (Peter G. Crary, Jerry Boone and Peter H. Schiff of counsel), for respondents in the first above-entitled matter.
    I. Plaintiffs’ appeal should be dismissed, since there is no substantial constitutional question directly involved. (Society of Plastics v County of Suffolk, 77 NY2d 761; Matter of Sun-Brite Car Wash v Board of Zoning & Appeals, 69 NY2d 406; Matter of Dairylea Coop. v Walkley, 38 NY2d 6; Wein v Comptroller of State of N. Y., 46 NY2d 394; New York State Coalition for Criminal Justice v Coughlin, 64 NY2d 660; Boryszewski v Brydges, 37 NY2d 361; Schlesinger v Reservists to Stop the War, 418 US 208; Valley Forge Coll. v Americans United, 454 US 464; United States v Richardson, 418 US 166; Warth v Seldin, 422 US 490.) II. Should this Court retain this appeal, controlling precedent establishes that plaintiffs do not have common-law standing as citizen-taxpayers to challenge statutory financing plans involving the issuance of bonds. (Wein v Comptroller of State of N. Y., 46 NY2d 394; New York State Coalition for Criminal Justice v Coughlin, 64 NY2d 660; Burns v Egan, 117 AD2d 38, 68 NY2d 806, 69 NY2d 602; People v Bing, 76 NY2d 331; Matter of Eckart, 39 NY2d 493; People v Hobson, 39 NY2d 479.) III. Plaintiffs do not have standing as voters to challenge statutory financing plans involving the issuance of bonds. (Wein v Levitt, 42 NY2d 300; Baker v Carr, 369 US 186; Phelan v City of Buffalo, 54 AD2d 262; Matter of City of New York v City Civ. Serv. Commn., 60 NY2d 436; Matter of Bradford Cent. School Dist. v Ambach, 56 NY2d 158; Matter of Dairylea Coop. v Walkley, 38 NY2d 6; Matter of Guardian Life Ins. Co. v Bohlinger, 308 NY 174.) IV. It is undisputed that this action was not commenced until after the completion of the chailenged financial transactions and the end of the 1990-1991 fiscal year; the action is barred by laches. (Burns v Egan, 117 AD2d 38; New York Pub. Interest Research Groups v Levitt, 62 AD2d 1074, 46 NY2d 849; Matter of General Bldg. Contrs. v Egan, 106 AD2d 688, 65 NY2d 601; Matter of Eberhart v La Pilar Realty Co., 45 AD2d 679; Finn v Morgan Is. Estates, 283 App Div 1105; Solnick v Whalen, 49 NY2d 224; Orange & Rockland Utils, v Philwold Estates, 70 AD2d 338, 52 NY2d 253.)

      Robert L. Schulz, John Salvador, Jr., and Gilbert O. Boehm, appellants pro se in the second above-entitled matter.
    I. The Act is expressly forbidden; the Legislature acted in defiance of constitutional restraints. (Sgaglione v Levitt, 37 NY2d 507.) II. Local Government Assistance Corporation’s bonds are void, invalid and unenforceable between issuer and purchasers. (People v Westchester County Natl. Bank, 231 NY 465; Wilkes County v Coler, 190 US 107; County of Bates v Winters, 97 US 83; School Dist. v Insurance Co., 103 US 707; Brenham v German Am. Bank, 144 US 173; Northern Bank v Porter Twp., 110 US 608; Nesbit v Riverside Ind. Dist., 144 US 610.) III. The debt of the Local Government Assistance Corporation is the debt of the State, contracted without voter approval. (Marbury v Madison, 1 Cranch [5 US] 137; People ex rel. Burby v Howland, 155 NY 270.) IV. The Act and the bonds issued pursuant thereto authorize a lending of the State’s credit to a public corporation and the assumption by the State of the liability of the debt obligations of a public corporation. V. The Act and the bonds issued pursuant thereto are patently unconstitutional. (East N. Y. Sav. Bank v Hahn, 293 NY 622, 326 US 230.) VI. The action being complained of is an absolute precedent. (Wein v State of New York, 39 NY2d 136; Newell v People ex rel. Phelps, 7 NY 9.) VIL Wein v City of New York (36 NY2d 610) offers no help to respondents but helps appellants with its "important” note. VIII. Newell v People ex rel. Phelps (7 NY 9) is an old case but nearly on point: respondents cannot escape its conclusions by merely setting up a "dummy corporation” as a State public-benefit corporation and earmarking tax revenues to its debt-service fund. (Williamsburgh Sav. Bank v State of New York, 243 NY 231.) IX. New York State Coalition for Criminal Justice v Coughlin (64 NY2d 660) helps appellants and offers no help to respondents. (Ofenlock v Gaynor, 66 Misc 2d 185, 35 AD2d 913; Wein v City of New York, 36 NY2d 610; Wein v Levitt, 42 NY2d 300.) X. Appellants have standing: the exception in section 123-b (1) of the State Finance Law is "abrogated”. (Boryszewski v Brydges, 37 NY2d 361.) XI. Plaintiffs, as voters, have standing to maintain this action. (Wein v Comptroller of State of N. Y, 46 NY2d 394; New York State Coalition for Criminal Justice v Coughlin, 64 NY2d 660.) XII. Laches is no defense. (Locust Club v City of Rochester, 48 Misc 2d 763, 29 AD2d 134, 22 NY2d 802, 894, 393 US 481; Fiorile v Goldman, 24 Misc 2d 944; Bata v Bata, 279 App Div 182, 306 NY 96; Bohemian Brethren Presbyt. Church v Greek Archdiocesan Cathedral of Holy Trinity, 94 Misc 2d 841, 70 AD2d 538; Orange & Rockland Utils. v Philwold Estates, 70 AD2d 338, 52 NY2d 253; Weisz v Parke-Bernet Galleries, 67 Misc 2d 1077, 77 Misc 2d 80; Prince Hall Grand Lodge F. & A. M. v Supreme Council, 32 Misc 2d 390; New York Pub. Interest Research Groups v Levitt, 62 AD2d 1074, 46 NY2d 849; New York State Coalition for Criminal Justice v Coughlin, 103 AD2d 40, 64 NY2d 660.) XIII. Appellants’ fundamental rights are being violated. (Boling v National Zinc Co., 435 F Supp 18; United States v State of Michigan, 460 F Supp 637; Murdock v Pennsylvania, 319 US 105; Douglas v Jeanette, 319 US 157; Hosey v Club Van Cortlandt, 299 F Supp 501; California Transp. v Trucking Unlimited, 404 US 508; Pizzolato v Perez, 524 F Supp 914; People v Siragusa, 81 Misc 2d 368; Wilmorite, Inc. v Eagan Real Estate, 454 F Supp 1124, 578 F2d 1372, 439 US 983; Morales v Turman, 326 F Supp 677.)

      Robert Abrams, Attorney-General, Albany (Frank K. Walsh, Jerry Boone and Peter H. Schiff of counsel), for respondents in the second above-entitled matter.
    I. Plaintiffs’ appeal should be dismissed on the ground that there is no substantial constitutional question directly involved. (Town of Hardenburgh v State of New York, 52 NY2d 536; Society of Plastics Indus. v County of Suffolk, 77 NY2d 761; Matter of Sun-Brite Car Wash v Board of Zoning & Appeals, 69 NY2d 406; Matter of Dairylea Coop. v Walkley, 38 NY2d 6; Wein v Comptroller of State of N. Y, 46 NY2d 394; New York State Coalition for Criminal Justice v Coughlin, 103 AD2d 40, 64 NY2d 660; Boryszewski v Brydges, 37 NY2d 361; Schlesinger v Reservists to Stop the War, 418 US 208; Valley Forge Coll, v Americans United, 454 US 464; United States v Richardson, 418 US 166.) II. Should this Court retain this appeal or grant leave to appeal, controlling precedent establishes that plaintiffs do not have common-law standing as citizen-taxpayers to challenge the issuance of bonds by public-benefit corporations. (Wein v Comptroller of State of N. Y, 46 NY2d 394; New York State Coalition for Criminal Justice v Coughlin, 103 AD2d 40, 64 NY2d 660; People v Bing, 76 NY2d 331; Matter of Eckart, 39 NY2d 493; People v Hobson, 39 NY2d 479.) III. Plaintiffs do not have standing as voters to challenge statutory financing plans involving the issuance of bonds. (Wein v Levitt, 42 NY2d 300; Baker v Carr, 369 US 186; Phelan v City of Buffalo, 54 AD2d 262; Matter of City of New York v City Civ. Serv. Commn., 60 NY2d 436; Matter of Bradford Cent. School Dist. v Ambach, 56 NY2d 158; Matter of Dairylea Coop. v Walkley, 38 NY2d 6; Wein v Comptroller of State of N. Y. 46 NY2d 394; New York State Coalition for Criminal Justice v Coughlin, 64 NY2d 660; Burns v Egan, 117 AD2d 38, 68 NY2d 806.) IV. Supreme Court correctly ruled that this action is barred by the doctrine of laches. (Burns v Egan, 117 AD2d 38; New York Pub. Interest Research Groups v Levitt, 62 AD2d 1074, 46 NY2d 849; Matter of General Bldg. Contrs. v Egan, 106 AD2d 688, 65 NY2d 601; Matter of Eberhart v La Pilar Realty Co., 45 AD2d 679; Finn v Morgan Is. Estates, 283 App Div 1105; Solnick v Whalen, 49 NY2d 224; Orange & Rockland Utils. v Philwold Estates, 70 AD2d 338, 52 NY2d 253.) V. Supreme Court correctly declared that the challenged legislation is constitutional on the ground that the bonds issued by Local Government Assistance Corporation do not constitute State debt under the holding of Wein v City of New York (36 NY2d 610 [1975]). (Comereski v City of Elmira, 308 NY 248; Quirk v Municipal Assistance Corp., 41 NY2d 644; Wein v State of New York, 39 NY2d 136; Newell v People ex rel. Phelps, 7 NY 9; Kelly v Merry, 262 NY 151.)
   OPINION OF THE COURT

Bellacosa, J.

In these cases, a group of citizens challenges State financing schemes embodied in chapter 190 (Schulz Appeal No. 1) and chapter 220 (Schulz Appeal No. 2) of the Laws of 1990. The lawsuits have failed up to now for lack of threshold standing to sue. Appellants advance several theories to support their standing to sue on discrete aspects of the lawsuits, and argue on the merits that the various public financing statutes violate provisions of the New York State Constitution pertaining to how the State may incur debt. We conclude that the appellants in Schulz Appeal No. 1 should be accorded standing only on a constitutional voter basis. However, we affirm the order of the Appellate Division in that appeal on the sole ground of laches. In Schulz Appeal No. 2, we dismiss the appeal for lack of a preserved substantial constitutional question.

L

Supreme Court dismissed those portions of the pleading challenging sections of chapter 190 of the Laws of 1990 (the Act) which deal with the extension of State credit and long-term debt without voter approval. The dismissal was predicated on the authority of State Finance Law § 123-b, New York State Coalition for Criminal Justice v Coughlin (64 NY2d 660) and Wein v Comptroller of State of N. Y. (46 NY2d 394). In particular, the challenges to sections 349 and 356, as well as portions of sections 339, 342 and 371 of chapter 190, were dismissed. The Supreme Court, however, found that "the remaining statutory provisions challenged by the petitioners do not address the 'authorization, sale, execution or delivery of a bond issue’ [State Finance Law § 123-b] and petitioners do not seek to litigate that issue”.

On the State defendants’ appeal to the Appellate Division, that Court reversed, finding that the challenges to all sections of the Act were interrelated and could not be effectively separated, since they "all stem from the initial issuance of the bonds in question”. For standing purposes analysis only, we likewise treat those aspects as interrelated. The Appellate Division on that basis dismissed the entire proceeding (Matter of Schulz v State of New York, 180 AD2d 42, 44). Appellants in Schulz Appeal No. 1 appeal from that Appellate Division order as of right on constitutional grounds (CPLR 5601 [b] [1]). The claim to standing as voters is expressly asserted in their primary pleading in this proceeding. The challengers asserted that they are registered voters and that they "have standing to maintain this action as voters who have been denied their right to vote in a referendum[ ] submitted to the people at a general election pursuant to Section 11 of Article VII of the State Constitution”.

The challenge in the proceeding underlying Schulz Appeal No. 2 sought to invalidate various sections of chapter 220 of the Laws of 1990 establishing the New York Local Government Assistance Corporation for the issuance of $4.7 billion in bonds. Both lower courts dismissed that proceeding outright on lack of standing. Significantly, plaintiffs in this case failed to allege their voter status as an express theory of standing in their pleadings in that case. The appeal from the Appellate Division order in that matter is also taken as of right on constitutional grounds (CPLR 5601 [b] [1]).

Because appellants in Schulz Appeal No. 1 asserted at the first opportunity in the pleadings their standing as voters pursuant to New York Constitution, article VII, § 11 that precise claim is preserved with respect to the order of the Appellate Division stemming from the State defendants’ appeal in that Court and the appeal from that order lies as of right. Because plaintiffs did not expressly allege voter standing in the proceeding underlying Schulz Appeal No. 2, no substantial constitutional question is presented and we thus dismiss that appeal and deny the motion for leave to appeal made at oral argument.

IL

Schulz Appeal No. 1 to this Court, properly before us, requires us to decide the standing-to-sue issue in the context of the challenge to various sections of chapter 190 of the State Laws of 1990. The Appellate Division dismissed that lawsuit in its entirety. The Act provides for the sale and leaseback of Attica Correctional Facility and Interstate Highway 287 by the State to a State-created public corporation. These sales were designed to generate $200 million and $30 million cash, respectively, as nonrecurring revenues, so called "one shots”. The purchases were financed by bond issues of the Urban Development Corporation during the fiscal year 1990-1991. The appraisal of the standing issue presents a difficult and complicated question which is affected by weighty precedential and statutory factors.

Until 1976, this Court consistently "held that the constitutionality of a State statute may be tested only by one personally aggrieved thereby, and then only if the determination of the grievance requires a determination of constitutionality” (St. Clair v Yonkers Raceway, 13 NY2d 72, 76, cert denied 375 US 970). In Boryszewski v Brydges (37 NY2d 361), this Court loosened the reins, stating: "We hold today that a taxpayer has standing to challenge enactments of our State Legislature as contrary to the mandates of our State Constitution” (id., at 362 [emphasis added]). The rationale for the expansive turnabout is simple, critical and compelling:

"We are satisfied that the time has now come when the judicially formulated restriction on standing (which we recognize has had a venerable existence) should be modified to bring our State’s practice with respect to review of State legislative action into conformity not only with the practice in the majority of other States but also with the procedural standing of taxpayers to challenge local actions (General Municipal Law, § 51). We are now prepared to recognize standing where, as in the present case, the failure to accord such standing would be in effect to erect an impenetrable barrier to any judicial scrutiny of legislative action. In the present instance it must be considered unlikely that the officials of State government who would otherwise be the only ones having standing to seek review would vigorously attack legislation under which each is or may be a personal beneficiary” (id., at 364).

Part of the issue today is whether our precedents and legislation after Boryszewski reversed its forward thrust with respect to these public financing challenges. More precisely, the question is whether "voters” may be turned out of court when they have been denied access to the voting booth in alleged violation of an express referendum right conferred by the New York Constitution. To draw from the key language of Boryszewski, should the Executive and Legislative Branches, with the support of our subsequent standing cases, be allowed to erect "an impenetrable barrier to any judicial scrutiny of legislative action[s]” which are alleged to have violated the highest organ of law, the State Constitution itself? We conclude not. History and sound checks-and-balances principles of governance recognize the People as the source of all governmental power. Because the express voter referendum requirement to incur debt contained in article VII, § 11 is inextricably linked to the constitutional grant of debt-incurring authority, we determine that voter standing should be recognized in the proceeding culminating in Schulz Appeal No. 1.

The general constitutional authorization to contract public debt and, likewise, the referendum core of the constitutional limitation on the exercise of that power are contained in article VII, § 11 of the New York Constitution. That section commands essentially that the State may borrow money only when a majority of the voters at a general election approve. The history of State finances and of the State Constitution provide clear evidence of the purport behind these provisions: Public indebtedness is viewed skeptically by the People of New York and must be tightly circumscribed by the People themselves and not entrusted finally even to their elected representatives. The constitutional prerequisite of a public referendum was considered the most effective way to avoid the "over-burdening of future generations by the incurring of long-term debt for capital improvements” (Wein v Levitt, 42 NY2d 300, 304). A similar skepticism applies to borrowing by long-term debt to pay ordinary operating expenses of the government. The People of New York enacted this constitutional provision because history had shown them the governmental officials of the day are often tempted to borrow against the future under circumstances in which the electorate itself needs to exert the ultimate, prudent check-and-balance (see generally, Wein v State of New York, 39 NY2d 136, 141-145; see also, Newell v People ex rel. Phelps, 7 NY 9 [1852]; Bergan, The History of the New York Court of Appeals, 1847-1932, 53 [1985]).

Serious concerns accompany a complete cloak of immunity that would preclude access to judicial review of challenged public financing schemes. Extension of the "taxpayer” standing limitations, to the extent urged by the State here (see, State Finance Law § 123-b; New York State Coalition for Criminal Justice v Coughlin, 64 NY2d 660, supra; Wein v Comptroller of State of N. Y., 46 NY2d 394, supra), logically and practically confers on the Legislature and Executive the power never again to submit their long-term debt financing schemes to the voters. The core provision of article VII, § 11, directing a voters’ constitutional referendum as protection against imprudent public financing, would be rendered not just moribund but dead. Since that protection emanates from the People and reserves that ultimate check to themselves, we cannot allow that right to become a dead letter, a mere set of hollow words.

The State defendants strongly counter, however, with the argument that the interests of "taxpayers” and "voters” in participating in the control of excessive or imprudent government debt are logically and virtually identical. Since our own precedents, Wein v Comptroller of State of N. Y. (46 NY2d 394, supra) and New York State Coalition for Criminal Justice v Coughlin (64 NY2d 660, supra), bar "taxpayer” standing to challenge the issuance of bonds or bond anticipation notes, and State Finance Law § 123-b does not explicitly accord standing to taxpayers in such instances, the State contends that "voter” standing in this case is unavailable. In sum, the State’s position is that, driven inexorably by the force of the cited authorities, the right to vote on a debt referendum pursuant to article VII, § 11 does not allow for separate and independent standing to sue. We disagree, and note that to the extent that Wein v Comptroller of State of N. Y. (supra), New York State Coalition for Criminal Justice v Coughlin (supra) and State Finance Law § 123-b have been read as a total ban on standing in such cases, they should not be followed, at least with respect to voter standing to sue on financing schemes subject to voter referendum approval.

IIL

In Schulz Appeal No. 1, since the appeal lies and the challengers enjoy constitutional voter standing, we would ordinarily turn next to the merits. However, another distinct threshold procedural issue commands our attention — the applicability of the equitable doctrine of laches. Indeed, because of the disposition of the case up to now on lack of standing only, the lower courts did not address the merits of appellants’ fiscal challenges and the State has not argued the merits in its briefs to this Court.

The laches hurdle is necessarily implicated. Appellants assert that they started their lawsuit within one year of the enactment of the enabling legislation, within one year of the adoption of the budget for the pertinent fiscal year, within 60 days of the actual sales of bonds, within one month of learning from newspapers about the State’s actions, and prior to the adoption of the next annual budget. They insist that should be prompt enough to avoid the laches bar.

Those time periods, however, do not in and of themselves resolve this issue. We must examine and explore the nature and subject matter of the particular controversy, its context and the reliance and prejudicial impact on defendants and others materially affected. Broadly stated, the profound destabilizing and prejudicial effects from delay may be decisive factors. These considerations must be examined for their impact on the State, on the operation and maintenance of orderly government, on those with whom the State engaged in these multimillion dollar financing transactions, and on society in general.

Turning then with further particularity to the application of the laches doctrine in this case, we note that this Court has said:

"Laches is defined as 'such neglect or omission to assert a right as, taken in conjunction with the lapse of time, more or less great, and other circumstances causing prejudice to an adverse party, operates as a bar in a court of equity.’ * * * The essential element of this equitable defense is delay prejudicial to the opposing party” (Matter of Barabash, 31 NY2d 76, 81).

Because the effect of delay on the adverse party may be crucial, delays of even under a year have been held sufficient to establish laches (see, Matter of Eberhart v La Pilar Realty Co., 45 AD2d 679; Finn v Morgan Is. Estates, 283 App Div 1105).

Chapter 190 of the Laws of 1990 was signed into law on May 25, 1990. The pertinent action attacking that enactment was not commenced until April 29, 1991. During that time, the challenged financing plans were transacted in reliance on the presumed constitutionality and regularity of chapter 190. A total of $377,326,674 in bonds were issued and sold to investors. The sales of Attica Correctional Facility and Interstate Highway 287 were completed, various other nonbond transactions were also carried out, and proceeds of $200 million and $20 million, respectively, were deposited in the Capital Projects Fund and General Fund.

Appellants’ demand for relief on the merits of their constitutional challenge would have the bonds recalled and refunded and the nonbond transactions nullified. Metaphorically, the impossibility of putting genies back in their bottles springs to the imagination. Realistically, constitutional challenges to public financing of such massive and profound dimension, possibly causing traumatic disturbance to settled matters of public finances and governance, should be undertaken reasonably promptly. To relax this procedural safeguard could disproportionately incur or threaten a greater harm to the public weal than the alleged constitutional transgression itself. Undoing such closed financial transactions would also add hundreds of millions of dollars of unplanned expenditures to the taxpayers’ burdens. In sum, fiscal year 1990-1991 has come and gone and its financial books in this respect have been closed. Equitable considerations of time, in the laches sense, may justifiably keep them closed and do not warrant, in the circumstances presented here, a piecemeal invalidation challenge as suggested (dissenting opn, at 353).

We find persuasive support in both New York Pub. Interest Research Groups v Levitt (62 AD2d 1074, appeal dismissed 46 NY2d 849) and Burns v Egan (117 AD2d 38, appeal dismissed 68 NY2d 806, Iv denied 69 NY2d 602). In both cases, the Appellate Division held that the sale of bonds during the period of delay constituted an important element of the prejudice which warranted application of the doctrine of laches. That is true in this case as well.

In another relevant though different context, this Court addressed the prejudice to State and local governments that occurs when challenges to State financing plans are delayed. The Court, in applying the legal limitations bar, a four-month Statute of Limitations for challenging Medicaid reimbursement rates, stated:

"Of special significance in the present instance is the impact on State and local budgetary planning which application of a six-year Statute of Limitations would introduce. One can visualize the fiscal complexity which would ensue if financial planning for a program with the broad ramifications of Medicaid were subjected to individual challenges for a period of up to six years” (Solnick v Whalen, 49 NY2d 224, 232).

We are unanimous that the pertinent constitutional right should be subject to judicial and popular scrutiny. In contrast to our dissenting colleague, however, we conclude that judicial review may be undertaken only upon a proper and timely invocation, including satisfaction of equitable laches prerequisites in the context of the particular dispute. Only then can alleged constitutional transgressions be addressed and remedied on the merits (see, e.g., Flushing Natl. Bank v Municipal Assistance Corp., 40 NY2d 731, 1088, 1094). The State defendants’ arguments persuade us that the time periods involved here do not meet the threshold test in light of the great prejudice certain to be inflicted on the State and its citizens at large when financial transactions of such magnitude and destabilizing impact are at stake and may be upset. Time must be of the essence and here appellants, for all their good-faith intentions in acting expeditiously as pro se litigants, did not satisfy that essential ingredient.

Because laches blocks our review of any of the substantive objections from appellants in this case, we emphasize that no inferences should be speculated upon or drawn as to the merits. Our references to any of the merits arguments, and to the history and the nature of the controversy, pertain solely and necessarily to our contextual consideration and application of the standing and laches doctrines. Notably, inasmuch as standing will now be available to voters, cases may develop in due time in which the courts will have to grapple and come to terms with the merits. We conclude that the time has not come here. So that there should be no misunderstanding or misdirection in view of the dissenting expression, prudence also dictates that we note that this case and our standing precedents, even to the extent expanded today, do not constitute implied endorsements or condemnations of the merits of any of the financing mechanisms that have been the subjects of challenge (see, e.g., New York State Coalition for Criminal Justice v Coughlin, 64 NY2d 660, supra; Wein v Comptroller of State of N. Y., 46 NY2d 394, supra). The Court today says and implies nothing about the constitutionality or merits of these financing mechanisms. Such questions remain open to substantive review and resolution in future cases.

Accordingly, the order of the Appellate Division should be affirmed, without costs, in Schulz Appeal No. 1 on the sole ground that the commencement of the litigation does not satisfy the equitable laches doctrine in the particular context and circumstances of the case. In Schulz Appeal No. 2, the appeal should be dismissed, without costs, on the ground that a preserved substantial constitutional question is not directly involved and the motion for leave to appeal should be denied.

Smith, J.

(dissenting). In these cases, the constitutionality of the State financing schemes set forth in chapter 190 (Schulz Appeal No. 1) and chapter 220 (Schulz Appeal No. 2) of the Laws of 1990 has been challenged by a group of citizens, appearing pro se (plaintiffs). The State and numerous State officials and agencies are named as defendants. The majority has concluded that plaintiffs have standing to maintain one of these actions "only on a constitutional voter basis” (Schulz Appeal No. 1, majority opn, at 343). Nevertheless, the majority did not reach the merits in either appeal because it concluded that the action in Schulz Appeal No. 1 was barred by laches and that Schulz Appeal No. 2 lacked "a preserved substantial constitutional question” (Schulz Appeal No. 2, majority opn, at 343) and, therefore, warranted dismissal. I concur with the majority to the extent that plaintiffs in Schulz Appeal No. 1 are held to have standing. However, I conclude that substantial constitutional issues have been preserved in Schulz Appeal No. 2 and that, in both Schulz Appeal No. 1 and No. 2, laches should not be a bar to a determination on the merits of these alleged constitutional violations, which are continuing in nature because of their long-term fiscal impact and any continuing authority under the challenged legislation. Therefore, Schulz Appeal No. 1 should be remanded to Supreme Court for a determination on the merits, and Schulz Appeal No. 2 should be remanded to the Appellate Division to address the determination on the merits by Supreme Court. Accordingly, I dissent.

With respect to Schulz Appeal No. 1, various sections of chapter 190 of the State Laws of 1990 (the chapter 190 legislation) permitted the sale and leaseback of Attica Correctional Facility (Attica) and Interstate 287, generating $200 million and $30 million, respectively. This was financed by the issuance of bonds by the Urban Development Corporation and the Thruway Authority. The chapter 190 legislation also authorized the Housing Finance Agency (HFA) to issue up to $500 million in bonds and notes, secured by the State, to fund housing capital program expenditures. As to Schulz Appeal No. 2, chapter 220 of the Laws of 1990 (the chapter 220 legislation) established the New York Local Government Assistance Corporation (LGAC) and authorized it to issue $4.7 billion in bond obligations, payable from State taxes. The challenged statutory provisions in both appeals were not submitted for approval in a voter referendum. Plaintiffs allege that by these actions the State incurred debts in violation of the New York Constitution, article VII, § 11 (voter referendum required to incur State debt); article VII, § 8 (loan of State’s credit to a public benefit corporation prohibited); and article X, § 5 (assumption by State of the obligations of a public benefit corporation prohibited).

The chapter 190 legislation became law on May 25, 1990. The petition challenging that legislation was served upon the Attorney-General on April 29, 1991. According to defendants, the sale and leaseback of Attica was completed on February 1, 1991. Plaintiffs allege that the bonds for this deal were sold on February 26, 1991. The Interstate 287 and HFA bonds were issued in March 1991. Indeed, defendants have alleged that the transactions authorized by this legislation were completed and the proceeds disbursed prior to April 29, 1991. This totaled over $377 million in bonds, with the resulting indebtedness of principal and accruing interest payments. Significantly, although HFA was authorized to issue up to $500 million in bonds and notes (see, §§ 370, 371), only approximately $104 million worth had been issued prior to this litigation and the record does not indicate whether further offerings were made in fiscal year 1991-1992, subsequent to the commencement of this proceeding. Moreover, the 1991-1992 budget was not adopted until July 4, 1991. Thus, when this proceeding was commenced, there was a potential for the incursion of additional debt by the further issuance of HFA bonds and the possibility that the 1991-1992 budget could address any problems created by the litigation. Nevertheless, Supreme Court addressed the issue of laches and found no showing of prejudice to the defendants but did find efforts by the defendants to delay a decision on the merits. Specifically, Supreme Court stated the following:

"In order to invoke the doctrine of latches [sic], a litigant must establish that there has been delay, which is prejudicial to it (See: New York Public Interest Research Group v Levitt, 62 AD2d 1074). In the case at bar, respondents/defendants have not established the requisite prejudice, and as such, the motion to dismiss upon the doctrine of latches [sic] must be denied. Indeed, they still do not appear to be in any hurry to reach a determination on the merits, given the fact that they have sought a further delay of this litigation by failing to join issue in an expeditious fashion.”

The chapter 220 legislation at issue in Schulz Appeal No. 2 became law on June 11, 1990. On or about February 10, 1992, plaintiffs served the petition upon which that appeal is predicated. Prior to the commencement of this proceeding, $2.4 billion in bonds was sold by LGAC — allegedly during the period between February 21, 1991 and December 12, 1991. However, there were pending transactions. Specifically, as indicated by the February 28, 1992 affidavit of Maryanne Gridley, an Assistant Deputy Comptroller for the State, future bond offerings were in jeopardy because of the temporary restraining order obtained by tbe plaintiffs. In addition, the February 27, 1992 affidavit of Patrick J. Búlgaro, Director of the Budget of the State of New York, argued against plaintiffs’ request for injunctive relief to permit "the last $300 million in LGAC bonds” to be sold. Those bonds were issued in March 1992 and the projected aggregate debt service cost for the years 1992 through 2021 is in excess of $6.4 billion. The Búlgaro affidavit also indicates that in fiscal year 1992-1993 or thereafter up to $1 billion in additional proceeds from bond sales was possible because the legislation authorized a total of $4.7 billion ($1.6 billion obtained in fiscal year 1991-1992 and $2.1 billion prior thereto). Despite these facts, Supreme Court concluded that even though only $2.4 billion of the authorized $4.7 billion in bonds had been sold, it would be prejudicial to halt the sale of other bonds. This ruling was in error.

It is clear that at the time that both of these proceedings were commenced, the issue of the constitutionality of the challenged legislation was viable because the authority to incur debt remained. Under such circumstances, the doctrine of laches should not bar a determination on the merits.

Furthermore, the merits of the defense of laches — delay and prejudice to defendants — must be determined within the context of the plaintiffs’ claims. Here, even if defendants’ transactions have been completed, plaintiffs’ allegation of an unconstitutional and continuing wrong of such magnitude that it will extend into the next century must present a greater concern. Since the alleged violations are constitutional and continuing with respect to the accrual of interest on the debt and the possibility of further actions pursuant to the challenged legislation, there is a dual basis for rejecting the laches defense (see, Matter of Burke v Sugarman, 35 NY2d 39, 45 [laches inapplicable because the "failure to comply with constitutional requirements for making appointments of eligibles to competitive positions is a continuing and constitutional wrong”]). Indeed, in rejecting the application of laches to bar challenges to alleged erroneous appointments because of the continuing failure to adhere to the constitutional requirements, this Court has stated that "though made in good faith [these actions] ought to be open to attack by the petitioners, because as citizens and taxpayers they are entitled to an opportunity to insist upon the construction which this court placed upon the * * * State Constitution” (Matter of Cash v Bates, 301 NY 258, 261). As such, the claims herein should not be barred by laches.

In addition, it is difficult to comprehend, upon reading the record in Schulz Appeal No. 2, how the majority can conclude either that the plaintiffs failed to allege voter standing or that no substantial constitutional question has been preserved. First, the plaintiffs asserted voter standing. Specifically, in the amended complaint of February 10, 1992, plaintiffs Schulz, Salvador and Boehm each alleged that he was "a registered voter registered to vote” in a particular town, that he "voted in the last general election,” and that he "is eligible to vote in the next referendum in a general election in New York State.” Second, in the first cause of action, the plaintiffs allege a "violation of Article VII, Section 11 of the State Constitution” (requiring a referendum to incur debts, with certain exceptions). This allegation is repeated throughout the complaint. Defendants clearly understood that voter standing was being alleged. In the affirmation in support of the motion to dismiss, defendants argued, "Since plaintiffs have alleged no injury in fact but only allege their citizen taxpayer and voter status as the basis of standing, they have no standing and the complaint must be dismissed.” Plaintiffs’ supplemental affidavit in opposition to the motion to dismiss addressed the issue of constitutional voter standing by citing New York State Coalition for Criminal Justice v Coughlin (103 AD2d 40, affd 64 NY2d 660) where the Appellate Division did not reach the issue because it was raised for the first time on appeal and was not supported by allegations in the record. Plaintiffs were thus contending that these deficiencies were not present in their case. Indeed, in this case the Appellate Division did reach the issue, albeit unfavorably for plaintiffs (Schulz v State of New York, 185 AD2d 596, 597). Therefore, the issue of voter standing has been before the court since the inception of this litigation (Schulz Appeal No. 2) and the substantive nature of the constitutional contentions is indisputable.

Finally, it must be emphasized that a determination on the merits of these appeals has not been made and none has been suggested. A determination of constitutionality would obviously end the matter, whereas a finding of unconstitutionality would raise the issue of an appropriate remedy. In such a case, the Court is free to consider whether or not such remedy should be purely prospective. What this Court should not do is fail to allow the merits of these constitutional issues to be addressed.

Chief Judge Kaye and Judges Simons, Titone and Hancock, Jr., concur with Judge Bellacosa; Judge Smith dissents in a separate opinion.

In Appeal No. 1: Order affirmed, without costs.

In Appeal No. 2: Appeal dismissed, without costs, upon the ground that no substantial constitutional question is directly involved. Motion for leave to appeal denied.

       Despite the Court’s dismissal of Schulz Appeal No. 2, the dissent nevertheless addresses a threshold preservation concern that is of no moment, because if that appeal did lie, the result in the case would be the same as the one the Court reaches in Schulz Appeal No. 1, i.e., affirmance on laches only.

      . The Appellate Division did not address the laches issue in Schulz Appeal No. 1, finding it unnecessary to do so because of its determination that the plaintiffs lacked standing to bring this action.

      . In Schulz Appeal No. 2, the Appellate Division did not address the issue of laches, instead deciding the case on the issue of standing.

      . In Schulz Appeal No. 1, the plaintiffs, in addition, allege that they "have standing to maintain this action.” Thus, the specific factual allegations as to voter standing are the same in both cases.


source: Caselaw Access Project

author: Smith, J.

license: Public Domain

text:
    The People of the State of New York, Appellant, v Dwayne Spivey, Respondent.
    Argued and submitted April 27, 1993;
    decided June 8, 1993

      POINTS OF COUNSEL

      Robert M. Morgenthau, District Attorney of New York County, New York City (Hilary Hassler, James M. McGuire and Patrick J. Hynes of counsel), for appellant.
    I. The Court below’s interpretation of the felony assault statute is at odds with precedent, settled rules of statutory construction, the statute’s legislative history, and common sense. (People v Gladman, 41 NY2d 123; People v Berzups, 49 NY2d 417; People v Bornholdt, 33 NY2d 75, cert denied sub nom. Victory v New York, 416 US 905; People v Giro, 197 NY 152; People v Keshner, 304 NY 968; People v Snow, 138 AD2d 217, 74 NY2d 671; People v Fonseca, 36 NY2d 133; People v Tychanski, 78 NY2d 909; People v Graham, 55 NY2d 144; Finger Lakes Racing Assn. v New York State Racing & Wagering Bd., 45 NY2d 471.) II. The verdict sheet was not a prohibited written instruction and given the Trial Judge’s limiting instructions regarding its use and his supplemental instructions on the law, nothing contained in it affected the fairness of the deliberative process. (People v Rogers, 181 AD2d 419; People v Kelly, 76 NY2d 1013; People v Moore, 71 NY2d 684; People v

      Owens, 69 NY2d 585; People v Sanders, 70 NY2d 837; People v Brooks, 70 NY2d 896; People v Nimmons, 72 NY2d 830; People v Taylor, 76 NY2d 873; People v Tucker, 77 NY2d 861; United States v Hasting, 461 US 499.) III. The trial court sanctioned the People for the loss of Officer Schumacher’s memo book, and defendant failed to preserve for review the question whether some other sanction short of a mistrial should have been imposed. In any case, after conducting a hearing to determine the circumstances surrounding the loss and to reconstruct the relevant entries, the trial court correctly determined that defendant was not prejudiced by the inadvertent loss. (People v Wallace, 76 NY2d 953; People v Martinez, 71 NY2d 937; People v Brooks, 174 AD2d 1050, 78 NY2d 962; People v Hyde, 172 AD2d 305, 78 NY2d 1077; People v Rigaud, 152 AD2d 643; People v Haupt, 71 NY2d 929; People v Valentine, 160 AD2d 325, 76 NY2d 797; People v Kelly, 62 NY2d 516; People v Rosado, 160 AD2d 505, 76 NY2d 864; People v Rice, 75 NY2d 929.)

      Feldman and Feldman, Hauppauge (Steven A. Feldman of counsel), for respondent.
    I. The assault by codefendant Brewer on Police Officer Schumacher was not proven beyond a reasonable doubt because, at the time of the alleged assault, defendant was handcuffed and in custody. (People v Reyes, 82 AD2d 925; People v Taylor, 141 AD2d 581; People v Capella, 111 AD2d 179; People v Nieves, 135 AD2d 579; People v La Belle, 18 NY2d 405; People v Sanchez, 128 AD2d 377; People v Berzups, 49 NY2d 417.) II. The trial court committed reversible error by listing the elements of certain counts of the indictment on the verdict sheet. (People v Gillispie, 144 AD2d 482; People v Nimmons, 72 NY2d 830; People v Valle, 143 AD2d 160; People v Jackson, 148 AD2d 750; People v Conners, 149 AD2d 722; People v Kelly, 76 NY2d 1013; People v Taylor, 76 NY2d 873; People v Owens, 69 NY2d 585.) III. The trial court correctly found that the loss of the sole eyewitness’s prior statement was "horrendous,” but abused its discretion when it declined to preclude the People from introducing evidence thereon. (People v Rosario, 9 NY2d 286, 368 US 866; People v Malinsky, 15 NY2d 86; People v Martinez, 71 NY2d 937.)
   OPINION OF THE COURT

Smith, J.

On this appeal, we modify the order of the Appellate Division. The count of assault in the second degree, which had been dismissed by the Appellate Division, should be reinstated. Moreover, the Appellate Division’s direction to the trial court to fashion a remedy sanctioning the prosecution for failure to produce Rosario material should be deleted. We affirm that part of the order directing a new trial because an improper verdict sheet was submitted to the jury.

According to trial testimony, defendant was arrested by Transit Police Officer Stephen Schumacher after Officer Schumacher observed defendant and three other men rob a man on a crowded midtown Manhattan street. The three other robbery suspects ran into a nearby subway station. Officer Schumacher left defendant with another police officer and followed the three men into the subway. He found them in the last car of a stalled train, seated amidst a pile of their outer garments. One of the men charged Officer Schumacher, striking him repeatedly in the head and leg, and the other two men stepped forward to help. All three fled when Officer Schumacher reached for his gun. After a short uninterrupted chase through the subway tunnel and into the street, two of the men were caught. Neither the third man nor the crime victim was ever found.

Prior to the commencement of a joint jury trial, Officer Schumacher’s memo book, which contained his entries concerning this case, was lost while in transit to the Police Department’s storage facility. At a hearing to reconstruct the contents of the memo book which pertained to this case, Officer Schumacher testified in great detail about the incident. At the conclusion of the hearing, defense counsel moved for a mistrial or, in the alternative, requested that Officer Schumacher be precluded from testifying "as to any reconstruction.” The court denied the motion for a mistrial and stated, "There is no reconstruction testimony involved before this jury.”

Officer Schumacher was the only witness to the incident who testified. After closing arguments, the court charged the jury on the law. Over defendant’s objection, the court also gave the jury a verdict sheet listing all of the counts in the indictment, as well as the various lesser included offenses under each of the counts along with the possible verdicts for each. Next to three of the counts, the court provided parenthetical explanatory language consisting of a portion of the statutory elements of the crime.

Defendant and the two codefendants were convicted, among other crimes, of assault in the second degree (felony assault). The Appellate Division reversed defendant’s convictions, on the law, dismissed the count charging defendant with felony assault, concluding that "a separate distinct felony is not to be viewed as a replacement for the mens rea or intent necessary for the assault,” and remanded the matter for a new trial on all other counts (177 AD2d 216, 224). The Court also directed the trial court to fashion an adequate sanction for the Rosario error, finding that "[t]he prejudice to this defendant occasioned by the loss of Officer Schumacher’s memo book is clear, and while the declaration of a mistrial may have been too severe a sanction, the failure to impose any sanction at all, [sic] was clearly error” (id., at 221).

On this appeal, the People contend that the felony assault count should be reinstated. They urge that, like the felony murder statute, the felony assault statute requires no discrete mens rea for the assaultive conduct, and that the specific intent is inferred from the intent to commit the underlying felony. Defendant argues that the conviction was properly reversed because he was not physically present when the assault was committed.

Penal Law § 120.05 (6) provides, in part: "A person is guilty of assault in the second degree when * * * [i]n the course of and in furtherance of the commission or attempted commission of a [predicate] felony, * * * or of immediate flight therefrom, he, or another participant if there be any, causes physical injury to a person other than one of the participants”. The language of that statute is almost identical to that of the felony murder statute (Penal Law § 125.25). As to the felony murder statute, this Court has stated that "[b]y operation of law, the intent necessary to sustain a murder conviction is inferred from the intent to commit a specific, serious, felonious act, even though the defendant, in truth, may not have intended to kill” (People v Gladman, 41 NY2d 123, 125). The Court also stated that a jury could properly find, as a question of fact, that the murder occurred in the immediate flight from the specific felonious act (see, id., at 129). We have adopted the same conclusions as to the felony assault statute (see, People v Snow, 74 NY2d 671, affg for the reasons stated at App Div 138 AD2d 217). There, the Appellate Division reasoned that, under the doctrine of constructive malice, "the intent necessary to sustain a conviction for felony murder or felony assault is inferred from the intent to commit the underlying felony” (id., at 221; see also, People v Fonseca, 36 NY2d 133, 136-137).

Thus, we hold that the intent necessary to sustain the conviction for felony assault is inferred from the intent to commit the underlying felony, and the issue of whether the assault occurred during the immediate flight from a predicate felony is a question of fact to be decided by a jury.

Moreover, the defendant need not be physically present at the scene of the assault. It is sufficient that the assault is made on a nonparticipant of a predicate felony "in furtherance of the commission or attempted commission of [the] felony, * * * or of immediate flight therefrom” (Penal Law § 120.05 [6]).

The People also argue that since the trial court agreed with defense counsel that there would be "no reconstruction testimony” before the jury and, during the trial, the prosecution made no reference to the reconstruction hearing, defendant received the requested relief and no new trial is required on this issue. Defendant asserts that an intermediate sanction, such as an adverse inference charge, may have been more appropriate.

As stated, after the reconstruction hearing, defense counsel moved for a mistrial or, in the alternative, requested that Officer Schumacher be precluded from testifying "as to any reconstruction.” Defendant made no request for an intermediate sanction at that time. Because the trial court granted the alternatively requested relief, no additional sanction is required on this issue.

Contrary to the People’s position, the verdict sheet containing the additional explanatory language next to three of the counts was error. We have consistently held that, unless the parties agree, it is reversible error for a trial court to give the jury a verdict sheet that, in addition to listing the counts, also lists some of the statutory elements of the counts (see, People v Kelly, 76 NY2d 1013; People v Taylor, 76 NY2d 873; People v Nimmons, 72 NY2d 830). Thus, there must be a new trial.

Accordingly, the order of the Appellate Division should be modified in accordance with the opinion herein, and, as so modified, affirmed.

Chief Judge Kaye and Judges Simons, Titone, Hancock, Jr., and Bellacosa concur.

Order modified in accordance with the opinion herein, and, as so modified, affirmed.

       Penal Law § 125.25 (3) provides, in part: "A person is guilty of murder in the second degree when * * * [a]cting either alone or with one or more other persons, he commits or attempts to commit robbery, burglary, kidnapping, arson, rape in the first degree, sodomy in the first degree, sexual abuse in the first degree, aggravated sexual abuse, escape in the first degree, or escape in the second degree, and, in the course of and in furtherance of such crime or of immediate flight therefrom, he, or another participant, if there he any, causes the death of a person other than one of the participants”.


author: Bellacosa, J.

text:
    In the Matter of Keiko Mizugami, Claimant, v Sharin West Overseas, Inc., et al., Appellants. Workers’ Compensation Board, Respondent.
    Argued April 27, 1993;
    decided June 8, 1993

      POINTS OF COUNSEL

      Fischer Brothers, New York City (Amy Levitt and Richard A. Cooper of counsel), for appellants.
    The 1953 Treaty of Friendship, Commerce and Navigation between the United States and Japan does not bar the application of section 17 of the Workers’ Compensation Law to the instant case. (Santovincenzo v Egan, 284 US 30; Sumitomo Shoji Am. v Avagliano, 457 US 176; Maximov v United States, 373 US 49; Matter of Iannone v Radory Constr. Corp., 285 App Div 751, 1 NY2d 671; Wickes v Olympic Airways, 745 F2d 363.)

      Robert Abrams, Attorney-General, New York City (Howard B. Friedland, Jerry Boone, Peter H. Schiff, Jane Lauer Barker

    and Theresa E. Wolinski of counsel), for respondent.
    The Court below correctly held that the 1953 Treaty of Friendship, Commerce and Navigation between the United States and Japan superseded Workers’ Compensation Law § 17. (United States v Pink, 315 US 203; Rosman v Trans World Airlines, 34 NY2d 385; Chew Heong v United States, 112 US 536; Matter of Skarpeletzos v Counes & Raptis Corp., 228 NY 46; Matter of Fogorty v Young, 1 AD2d 751; Matter of Industrial Commr. v Five Corners Tavern, 47 NY2d 639; Matter of Iannone v Radory Constr. Corp., 285 App Div 751, 1 NY2d 671; Jennings v Boeing Co., 660 F Supp 796, 838 F2d 1206.)
   OPINION OF THE COURT

Bellacosa, J.

This case presents the question whether the terms of the 1953 Treaty of Friendship, Commerce and Navigation between the United States and Japan require that a nonresident Japanese national claimant must be treated in the same manner as a United States citizen, irrespective of Workers’ Compensation Law § 17. The United States Constitution provides that a duly ratified treaty made by the United States "shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding” (US Const art VI). Because we determine that claimant, as a foreign national dependent, is entitled to equal treatment under the Treaty (4 UST 2063) between the United States and Japan, we hold that the one-year support requirement for nonresident alien death benefits in Workers’ Compensation Law § 17 is superseded. The order of the Appellate Division affirming the decision of the Workers’ Compensation Board awarding death benefits to claimant Mizugami should be affirmed.

Keitaro Mizugami, an employee of Sharin West Overseas, Inc., was stabbed to death by an intruder at the company’s headquarters in New York City on August 14, 1985 at 10:00 a.m. Claimant-respondent Keiko Mizugami, the decedent’s mother, filed a workers’ compensation claim for death benefits. The claim was contested by the decedent’s employer.

An Administrative Law Judge ruled that claimant was a dependent parent under the Workers’ Compensation Law and awarded her death benefits. Contending that claimant was not supported by the deceased employee for the statutory period of one year prior to the fatal stabbing, the employer and its insurer sought Workers’ Compensation Board review. Workers’ Compensation Law § 17 imposes a durational requirement of one year of support for a surviving dependent parent who is an alien nonresident of the United States or Canada to qualify for death benefit payments.

The Board affirmed the award, and on appeal, the Appellate Division unanimously affirmed. The Appellate Division "agree[d] with the employer that there was no proof that [the deceased employee] had supported claimant for one year prior to the accident as required by the statute setting forth the preconditions for recovery by nonresident aliens” (Matter of Mizugami v Sharin W. Overseas, 183 AD2d 962, 962-963). That , i°Ul\ ’ however, affirmed the Board’s decision, by ruling that e urational condition which Workers’ Compensation Law § 17 attaches to nonresident alien claims is violative of the equal treatment core of the Treaty between the United States and Japan.

Article III, U 1 of the Treaty provides that "[njationals of either Party shall be accorded national treatment in the application of laws and regulations within the territories of the other Party that establish a pecuniary compensation, or other benefit or service, on account of disease, injury or death arising out of and in the course of employment or due to the nature of employment”. "National treatment” is defined as "treatment accorded within the territories of a Party upon terms no less favorable than the treatment accorded therein, in like situations, to nationals * * * of such Party” (Treaty, art XXII, H 1).

The employer and its carrier argue that the phrase "within the territories of the other Party” in article III, 1 of the Treaty should be read to modify "[njationals of either Party” rather than "application of laws and regulations”. The resulting construction would mean, according to appellants’ argument, that the Treaty would prohibit discrimination, i.e., the imposition of the one-year durational prerequisite for benefits, against a Japanese national who is a resident of the United States, but would allow discrete treatment against a claimant, as here, who is a Japanese national, resident in Japan.

In Matter of Iannone v Radory Constr. Corp. (1 NY2d 671), this Court construed a similar Treaty of Friendship, Commerce and Navigation between the United States and the Italian Republic (63 US Stat 2255). That Treaty, ratified in 1949, was of a slightly earlier vintage than the United States-Japan Treaty at issue here. Article XII, H 1 of the Italian Treaty provided: "The nationals of either High Contracting Party, regardless of alienage or place of residence, shall be accorded rights and privileges no less favorable than those accorded to the nationals of the other High Contracting Party, under laws and regulations within the territories of such other High Contracting Party” (quoted in Matter of Iannone v Radory Constr. Corp., 285 App Div 751, 753, affd no opn 1 NY2d 671, supra).

The United States-Italy Treaty uses the modifying phrase "within the territories of such other * * * Party,” which was retained identically in the United States-Japan Treaty at issue on this appeal. Patently, in the Italian Treaty, the key phrase modifies "laws and regulations” and not "nationals of either * * * Party”. To read it otherwise would make the specific stipulation "regardless of * * * place of residence” a meaningless additive. The United States-Japan Treaty retains the phrase "within the territories of the other Party” in-virtually the same context. We discern no justification for reconstruing the significance and operative value of that phrase. Rather, we look to the "ordinary meaning” and "clear import” of the United States-Japan Treaty provision (Santovincenzo v Egan, 284 US 30, 40; Sumitomo Shoji Am. v Avagliano, 457 US 176, 180), and conclude that it modifies "application of laws and regulations.” Thus, when "national treatment” mfist be accorded, as here, it should be done with respect to the application of all laws and regulations effective in the territories of the party required to grant such treatment. The effective translation is that the States of the United States are required to accord "national treatment” equally to foreign nationals and United States citizens in these circumstances.

However, appellants rely heavily on a difference in language that does appear between the Italian Treaty in Iannone and the Japanese Treaty at issue here. The Japanese Treaty replaced the stipulation found in the Italian Treaty that nationals of either party, "regardless of alienage or place of residence, shall be accorded rights and privileges no less favorable than those accorded to the nationals of the other * * * Party”. The substituted stipulation simply states that claimants "shall be accorded national treatment”.

Appellants’ position essentially rises or falls on this change of language. They claim it indicates that equal treatment need not be accorded nonresident foreign national dependents under circumstances such as are present in this case. In support of this contention, they point to historical evidence of disquietude over the erosion of the powers of State Legislatures superimposed by treaties. This concern manifested itself at the time that the language of Friendship, Commerce and Navigation treaties, such as the one with Japan at issue here, was being revised under the auspices of the United States Department of State.

That evidence includes a proposed amendment to article VI of the United States Constitution introduced as a Senate Joint Resolution by Senator Bricker of Ohio in 1952 (see, 98 Cong Rec 907, 908; Senate Jt Res 130, 82d Cong, 2d Sess [1952]). The Bricker amendment, among other features, would have required an explicit act or joint resolution of Congress before a treaty or executive agreement could abrogate a United States law or the laws or Constitutions of the States. Regardless of the motivations behind that proposal or similar proposals (see, Sutherland, Restricting the Treaty Power, 65 Harv L Rev 1305, 1325-1326), no amendment to the Supremacy Clause was effected. Furthermore, although appellants point to concerns among State workers’ compensation officials regarding "Federal encroachment” into that domain (142 Labor Dept, Bureau of Labor Standards Bull, at 2 [1950]), there is no evidence that these parochial concerns were translated into the uniform national treaty revisions now before us.

Instead, assurances were given by State Department officials in 1953 during the course of hearings on the Treaty with Japan which indicate that the treaties under consideration would not significantly alter the powers retained by the States under earlier treaties (see, Hearings Before the Subcommittee on Commercial Treaties of the Senate Committee on Foreign Relations, 83d Cong, 1st Sess 4 [1953]; Hearings Before the Subcommittee on Commercial Treaties of the Senate Committee on Foreign Relations, 82d Cong, 2d Sess 16 [1952]). Appellants have not persuasively supported their argument that the asserted language substitution produces the substantive revision of rights and obligations of the magnitude they attribute to it.

Indeed, we conclude that the use of the term "national treatment” can be construed merely as achieving greater brevity with the same substantive meaning and without a significant change in entitlements. Respondent Workers’ Compensation Board points to Jennings v Boeing Co. (660 F Supp 796 [ED Pa 1987], mot for reconsideration denied 677 F Supp 803, affd no opn 838 F2d 1206), in which a United States District Court was required to construe "national treatment” in a tort liability and workers’ compensation provision of a 1950 Friendship, Commerce and Navigation Treaty with Ireland. Like the Japanese Treaty, the Irish Treaty guaranteed nationals of either country "national treatment in the application of laws and regulations within the territories of the other Party” (id., at 800). The Jennings plaintiff was an Irish and British citizen and non-United States resident bringing suit in Pennsylvania. The court found that she was entitled to the same treatment as an American nonresident of Pennsylvania. Applying similar reasoning in this case would confer on claimant the rights of an American nonresident of New York, and she would prevail. Appellants have cited no Federal or State case which gives "national treatment” a different substantive interpretation.

Appellants, on the other hand, point to testimony given by an Assistant Secretary of State in congressional subcommittee hearings on postwar Friendship, Commerce and Navigation treaties regarding the phrase "national treatment”. The State Department official stated that " '[n]ational treatment’ insures that our own nationals or corporations will receive treatment equal to the treatment accorded to the nationals of the country with which we have the treaty” (Hearings Before the Subcommittee on Commercial Treaties of the Senate Committee on Foreign Relations, 82d Cong, 2d Sess 7 [1952]). The official then explained that in speaking of the nationals of the other treaty country, he was referring to nationals in their own countries (id.). We disagree with appellants’ argument that these statements indicate that "national treatment” applies only to resident aliens, because that would make the protection superfluous. Resident aliens in the United States are already guaranteed equal protection by the Constitution. Since treaties generally involve a quid pro quo, it is reasonable to conclude that the United States offered protection to its treaty partners beyond that constitutionally mandated in return for a guarantee of reciprocal additional protection for United States nationals.

We note finally that in the construction of a treaty such as this, "the honor of the government and people of the United States is involved” (Chew Heong v United States, 112 US 536, 540 [1884]). Because the durational qualification provision of Workers’ Compensation Law § 17 conflicts with the parity policy of the "national treatment” provision of the United States-Japan Treaty, it must be put aside. The Treaty mutually and reciprocally secures equality of treatment and benefits for both American and Japanese dependent nationals. The pertinent provision of the Workers’ Compensation Law, as applied to claimant Mizugami, that would preclude her recovery of benefits for the death of her employee son in New York, is superseded by the Treaty.

Accordingly, the order of the Appellate Division should be affirmed, with costs.

Chief Judge Kaye and Judges Simons, Titone, Hancock, Jr., and Smith concur.

Order affirmed, with costs.