Council of New York v. Giuliani

231 A.D.2d 178, 662 N.Y.S.2d 516, 1997 N.Y. App. Div. LEXIS 8589
CourtAppellate Division of the Supreme Court of the State of New York
DecidedSeptember 8, 1997
StatusPublished
Cited by3 cases

This text of 231 A.D.2d 178 (Council of New York v. Giuliani) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Council of New York v. Giuliani, 231 A.D.2d 178, 662 N.Y.S.2d 516, 1997 N.Y. App. Div. LEXIS 8589 (N.Y. Ct. App. 1997).

Opinion

OPINION OF THE COURT

Per Curiam.

On November 8, 1996, the Board of Directors of the New York City Health and Hospitals Corporation (hereinafter HHC) approved a sublease of Coney Island Hospital (hereinafter CIH) to a for-profit entity, Primary Health Systems New York, Inc. (hereinafter PHS-NY), for an initial period of 99 years with an option to renew for an additional 99 years. CIH serves a population of about 750,000 in South Brooklyn. Pursuant to the terms of the sublease, PHS-NY agreed to operate CIH as a community-based, acute-care inpatient hospital and to provide substantially the same medical services currently provided by HHC. The sublease further provided that the City and HHC would enter into a separate agreement with PHS-NY in which they would agree not to compete with PHS-NY by operating a hospital within the "catchment area” of CIH.

The sublease was part of a plan announced in 1994 by New York City Mayor Rudolph W. Giuliani to privatize the hospitals operated by HHC. Through the City’s Economic Development Corporation, offering memoranda were issued in 1995 for three targeted HHC hospitals (CIH, Queens Hospital Center, and Elmhurst Hospital Center in Queens) which proposed a [180]*180transfer of the facilities and their services to private entities through long-term subleases. In an effort to obtain broader public review of the privatization plan, the City Council commenced this declaratory judgment action in March 1996 against, inter alia, the Mayor and HHC. The City Council alleged, inter alia, that the privatization of the target hospitals by means of subleases with private institutions required City Council approval and was subject to the Uniform Land Use Review Procedure ([hereinafter ULURP] NY City Charter § 197-c). A second declaratory judgment action, which raised essentially the same issues, was commenced in May 1996 by two unincorporated associations whose members live and work in the communities served by CIH and the targeted hospitals in Queens (see, Campaign to Save Our Pub. Hosps.-Queens Coalition v Giuliani, — AD2d —, 1997 NY Slip Op — [decided herewith]). The parties cross-moved for summary judgment, and the Supreme Court, Queens County, directed that the actions be jointly tried.

While the parties’ motions and cross motions for summary judgment were pending, the HHC Board of Directors approved the CIH sublease. The plaintiffs in both actions amended their complaints to allege that the sublease of CIH constituted an ultra vires act, and the motion papers were amended to address this issue. The Supreme Court granted summary judgment to the plaintiffs herein to the extent of declaring that the subleasing of HHC facilities was subject to ULURP, that such subleasing required the approval of the Mayor and the City Council, and that HHC did not have statutory authority to sublease CIH. We agree with the Supreme Court that the CIH sublease, which transfers responsibility for the operation of the hospital and the provision of medical services, is not authorized by HHC’s governing statute.

HHC was established as a public benefit corporation by the State Legislature in 1969 (see, McKinney’s Uncons Laws of NY § 7381 et seq. [New York City Health and Hospitals Corporation Act (hereinafter NYCHHCA); L 1969, ch 1016, as amended]). Resolution of the issue of whether HHC has the authority to privatize its hospital facilities begins with the language of the enabling statute (see, Giuliani v Hevesi, 90 NY2d 27). In interpreting the statute, " 'the spirit and purpose of the act and the objects to be accomplished must be considered. The legislative intent is the great and controlling principle’ ” (Ferres v City of New Rochelle, 68 NY2d 446, 451, quoting People v Ryan, 274 NY 149, 152).

[181]*181The Legislature’s intent in creating HHC can readily be discerned from the statute’s lengthy "Declaration of policy and statement of purposes” (McKinney’s Uncons Laws of NY § 7382 [NYCHHCA § 2]). The Legislature declared that the provision of health care and the operation of the City’s health facilities were of "vital and paramount concern” (McKinney’s Uncons Laws of NY § 7382). Upon finding that the City’s health facilities were inadequate and that the administrative system then in place obstructed and impaired the "efficient operation of health and medical resources”, the Legislature concluded that a system was required which would permit flexibility in the provision of health care, "particularly to those who can least afford such services” (McKinney’s Uncons Laws of NY § 7382). The Legislature stated: "It is found, declared and determined that in order to accomplish the purposes herein recited, to provide the needed health and medical services and health facilities, a public benefit corporation * * * should be created to provide such health and medical services and health facilities and to otherwise carry out such purposes * * * and that the exercise by such corporation of the functions, powers and duties as hereinafter provided constitutes the performance of an essential public and governmental function” (McKinney’s Uncons Laws of NY § 7382).

The statute required HHC and the City to enter into an agreement by July 1, 1970, "whereby the corporation shall operate the hospitals then being operated by the city for the treatment of acute and chronic diseases” (McKinney’s Uncons Laws of NY § 7386 [1] [a] [NYCHHCA § 6 (1) (a)]; emphasis added). CIH was among the hospitals that the City leased to HHC for an annual rent of $1 "for its corporate purposes, for so long as it [HHC] shall be in existence” (McKinney’s Uncons Laws of NY § 7387 [1] [NYCHHCA § 7 (1)]). The Legislature clearly contemplated that the municipal hospitals would remain a governmental responsibility and would be operated by HHC as long as HHC remained in existence.

The defendants contend, however, that HHC’s corporate purpose of providing quality medical care to the CIH community can best be accomplished through the sublease with PHS-NY and that the statute explicitly authorizes HHC to sublease a hospital to a private entity. The defendants rely upon that portion of the statute which gives HHC the power: "To * * * dispose of by sale, lease or sublease, real or personal property, including but not limited to a health facility, or any interest therein for its corporate purposes; provided, however, [182]*182that no health facility or other real property acquired or constructed by the corporation shall be sold, leased or otherwise transferred by the corporation without public hearing by the corporation after twenty days public notice and without the consent of the board of estimate of the city” (McKinney’s Uncons Laws of NY § 7385 [6] [NYCHHCA § 5 (6)]).

We disagree with the defendants’ contention that this provision, which permits HHC to dispose of a health facility, also authorizes it to "sublease” its responsibility to provide medical services. The words of a statute should not be read in isolation to reach a construction which is contrary to the over-all statutory purpose and scheme. Rather, a statute should be construed as a whole and all parts read together to determine the legislative intent (see, Matter of Long v Adirondack Park Agency, 76 NY2d 416, 420; McKinney’s Cons Laws of NY, Book 1, Statutes § 97). The purpose and intent of the NYCHHCA was to establish one entity accountable to the public to operate the municipal hospitals for the benefit of the public.

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Related

Council of New York v. Giuliani
183 Misc. 2d 799 (New York Supreme Court, 1999)
Jones v. City of New York
261 A.D.2d 115 (Appellate Division of the Supreme Court of New York, 1999)
Campaign To Save Our Public Hospitals—Queens Coalition v. Giuliani
242 A.D.2d 518 (Appellate Division of the Supreme Court of New York, 1997)

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Bluebook (online)
231 A.D.2d 178, 662 N.Y.S.2d 516, 1997 N.Y. App. Div. LEXIS 8589, Counsel Stack Legal Research, https://law.counselstack.com/opinion/council-of-new-york-v-giuliani-nyappdiv-1997.