Diane T. Dean, for Appellant Public Service.
Submitted by Daniel Smirlock, for Appellant Governor.
Martin S. Kaufman, for Respondents.
New York Citizens Utility Board, Inc., et al., amici curiae.
KAYE, CHIEF JUDGE:
This case requires us to decide whether an Executive Order issued by the Governor violates the principle of separation of powers under the New York State Constitution. We conclude that the Governor acted within his authority, and therefore reverse the o rder of the Appellate Division declaring the Executive Order unconstitutional.
On January 3, 1991, then-Governor Mario Cuomo issued Executive Order No. 141 (9 NYCRR 4.141) authorizing the creation of a private, not-for-profit corporation known as the Citizens Utility Board (CUB) intended, among other things, to represent the intere sts of residential utility customers in ratemaking and other proceedings before the Public Utilities Commission. In issuing the order creating the CUB, the Governor cited "the policy of this State to foster and encourage citizen participation in utility matters and to facilitate effective representation and advocacy of the interests of residential utility customers in the regulatory process." He noted as well that "individual participation by residential utility customers * * * is impracticable because of the expertise required and the disproportionate expense of taking such action."
In addition to establishing the CUB, Executive Order No. 141 provided that the Board would have access to as many as four State agency mailings per year for the purpose of disseminating information to New York citizens about the CUB's purpose and activit ies and soliciting memberships and contributions. The Board was required to reimburse the agencies for any increase in postage attributable to its enclosures.
Five months after the issuance of the Executive Order, plaintiff-respondent Pierre Bourquin, a New York "citizen, resident and taxpayer," as well as various other non-profit corporations "primarily engaged in educating the public about government expenditures and representing * * * individuals, organizations and corporations in constitutional and public policy-oriented litigation," challenged Executive Order No. 141 as violative of the separation of powers doctrine. Plaintiffs also sought a preli minary injunction enjoining implementation of the Executive Order.
Supreme Court rejected plaintiffs' separation of powers claim and dismissed their complaint, concluding that "the Legislature has clearly demonstrated its goal of protecting the interests of New York's utility consumers and its further policy aimed at ma ximizing public participation in the processes aimed at achieving that end." The Executive Order, according to the trial court, "promote[d] these general legislative policies in a manner that did not usurp legislative prerogative," such that "defendants acted within their respective constitutional and statutory authority."
The Appellate Division reversed and declared Executive Order No. 141 unconstitutional, concluding "that the Governor impermissibly exceeded stated legislative policy in issuing the Executive Order" because, in the court's view, "[t]he statutory provision s cited by defendants * * * demonstrate that the establishment of a single CUB with access to State mailings is at odds with the existing legislative policy which charges the Public Services Commission, the Consumer Protection Board and the Attorney Gener al to protect consumers in utility proceedings." Defendants now appeal as of right pursuant to CPLR 5601(b)(1).
The constitutional principle of separation of powers, "implied by the separate grants of power to each of the coordinate branches of government" (Clark v Cuomo, 66 NY2d 185, 189; NY Const art 3, § 1; art 4, § 1), requires that the Legislature make the critical policy decisions, while the Exe cutive Branch's responsibility is to implement those policies (New York State Health Facilities Assn., Inc. v Axelrod, 77 NY2d 340, 349).
Despite this functional separation, this Court has always understood that the duties and powers of the legislative and executive branches cannot be neatly divided into isolated pockets (Clark v Cuomo, 66 NY2d at 185; see also Plaut v Spendthrif t Farm, Inc., __ US __, 115 SCt 1447, 131 LEd2d 328, 1995 US LEXIS 2843, * 61 [Apr. 18, 1995] [Breyer, J., concurring] ["[T]he separation of powers doctrine] does not divide the branches into watertight compartments, nor establish and divide fields of black and white. [I]mportant separation of powers decisions * * * sometimes turn[], not upon absolute distinctions, but upon degree."] [citations omitted]). We have thus acknowledged that there need not be a specific and detailed legislative expression authorizing a particular executive act as long as "the basic policy decisions underlying the regulatory actions have been made and articulated by the Legislature" (New York State Health Facilities Assn., Inc. at 348). In other words, "[i]t is only when the Executive acts inconsistently with the Legislature or usurps its prerogatives, that the doctrine is violated." (Clark at 189.) Recognizing the necessity of "some overlap between the three separate branches of government" as well as the "great flexibility" to be accorded the Governor in determining the methods of enforcing legislative policy, this Court in Clark v Cuomo (66 NY2d 185, 189) upheld against a separation of powers challenge then-Governor Cuomo's issuance of an Executive Order establishing a Voter Registration Task Force with access to State agencies in distributing its materials.[n 1]
The decision in Clark, like others that followed (e.g., New York Health Facilities Assn., Inc. v Axelrod, 77 NY2d 340), resulted from this Court's longstanding and steadfast refusal to construe the separation of powers doctrine in a vacuum, instead viewing the doctrine from a common sense perspective. As Chief Judge Cardozo explained more than a half- century ago: "[t]he exigencies of government have made it necessary to relax a merely doctrinaire adherence to a principle so flexible and practical, so largely a matter of sensible approximation, as that of the separation of powers" (Matter of Richard son, 247 NY 401, 410 [1928]).
As legislative authorization for the creation of the Task Force at issue in Clark, the Governor relied on Election Law § 3-120(13) which provided that "the state board of elections shall have the power and duty * * * to encourage the broadest possible voter participation in elections." In support of Executive Order No. 141, the Governor relied on article 20 of the Executive Law--containing nearly identical language--empowering the Consumer Protection Board to "promote and encourage the prote ction of the legitimate interests of consumers within the state" (Executive Law § 553[2][b]).[n 2] A simple comparison of the above-quoted Election Law provision at issue in Clark with the Executive Law provision at issue here compels the conclusion that the statutes are analogous.[n 3] Each vests a particular entity (boards of elections or the Consumer Protection Board) with the power to promote a broad, even "general" legislative p urpose (promoting voter registration or protecting the interests of utility consumers).
The analogy between the two cases is strengthened by the fact that in each case, the Governor--by Executive Order-created an entity other than that contemplated by the Legislature (the Voter Registration Task Force and the CUB) to implement those statuto ry goals. In Clark, we explicitly rejected the argument that the Legislature's decision to repose certain powers in local boards of elections prevented the Governor from establishing another governmental body intended to promote those same policie s (Clark, 66 NY2d at 190).
Indeed, that the creation of the CUB was fully consistent with existing legislative policy is evidenced by the fact that three other entities already had overlapping authority to protect utility customers--the Consumer Protection Board, the Attorney Gene ral and the Public Service Commission. In creating the CUB, the Governor recognized that in part because of the enormous demands on them from other duties, none of these agencies were adequately representing the interests of residential utility customers who lack the incentive to hire lawyers and lobbying groups to advance their interests.
Executive Order No. 141, like the order at issue in Clark, does not formulate a specific policy with respect to utility companies or their residential customers. It does not, for example, instruct the CUB to press for lower utility rates or to seek greater disclosure of the financial status of utility com panies. Unlike the detailed and comprehensive Executive Orders and administrative regulations that this Court has struck down in the past (see Broidrick v Lindsay, 39 NY2d 641 [affirmative action program for New York City contracts]; Rapp v Car ey, 44 NY2d 157 [financial disclosure requirements for State employees]; Under 21 v City of New York, 65 NY2d 344 [order prohibiting employment discrimination by city contractors on basis of sexual orientation]; Boreali v Axelrod, 71 NY2 d 1 [antismoking regulations in public establishments]), Executive Order No. 141 has no substantive content beyond that of creating the CUB itself and giving it access to state mailings for a threeyear period. What the CUB, a private not-for-profit corpo ration, ultimately chooses to do with the funds it solicits is a decision entrusted solely to its membership. Executive Order No. 141 is thus well within the boundaries of this Court's recognition in Clark that the Executive Branch's mere creation of a n ew procedural, administrative mechanism, such as a task force or consumer board, to better implement a legislative policy does not offend the Constitution.[n 4]
Indeed, there is yet another important parallel between the instant case and Clark. In each case, the Legislature considered but failed to enact a bill substantially similar to the provisions of the Executive Orders ultimately issued by the Governor. In each case, the plaintiffs argued that such failure shou ld be taken as proof of hostile legislative intent. As we said in Clark, however, "that proposed legislation similar to [the] Executive Order * * * was not passed does not indicate legislative disapproval of the programs contemplated by the order. Legislative inaction, because of its inherent ambiguity affords the most dubious foundation for drawing positive inferences" (Clark, 66 NY2d at 190-91 [citations omitted]; cf. Boreali, 71 NY2d at 13).
While it may have been more desirable for the Legislature to have passed a statute establishing the CUB, the question whether the Governor had the authority to do so by Executive Order is not one of preference but of constitutionality. It is not the rol e of this Court to dictate how public policy should be implemented, but only to state when and how the Constitution has been offended. The Constitution was not violated by Executive Order No. 141.
Plaintiffs' remaining constitutional challenges to Executive Order No. 141 lack merit. Accordingly, the order of the Appellate Division should be reversed, with costs, defendants' motion for summary judgment granted, plaintiffs' cross motion for summary judgment denied, and judgment granted declaring that Executive Order No. 141 is constitutional.
F O O T N O T E S
1. Specifically, the Executive Order at issue in Clark (9 NYCRR 4.43) required all State agencies having contact with the public to make voter registration forms available in their offices and to assist in filling out such forms. A Voter Registration Task Force consisting of the heads of various State agencies was charged with overseeing the implementation of this program (see Clark, 66 NY2d at 187).
2. The other statutory provisions relied on in promulgating Executive Order 141 are the Home Energy Fair Practices Act (PSL § 30) where the Legislature "declared [it] to be the policy of this state that the continued provision of ga s, electric and steam service to residential customers without unreasonable qualifications or lengthy delays is necessary for the preservation of the health and general welfare and is in the public interest" as well as various sections of the Public Servi ce Law requiring that charges to residential utility consumers "be just and reasonable" (see PSL § § 65, 79[1], 89-b, 91) and that no changes in rates be made without adequate notice to the public (see PSL § § 66[12][b], 80[10][b], 89- c[10][b], 92[2][a]).
3. The provisions of the Social Services Law involved in New York Health Facilities Assn., Inc. v. Axelrod (77 NY2d 340), the other case which the dissent attempts to distinguish (dissent, pp. 8-9), also contain similar language. Sections 363 and 364 of the Social Services Law, for example, declare that "[m]edical assistance for needy persons [is] a matter of public concern" and that the Department of Health "shall be responsible for establishing and ma intaining standards [for nursing homes]" (id. at 347).
4. The dissent concludes that Executive Order 141 is unconstitutional primarily because it authorizes "a new remedy for [utility] consumer involvement" (dissent, p. 9). The substitution of the word "consumer" with "voter" in this senten ce, however, results in precisely the situation involved in Clark where the executive branch created a "new remedy" for unregistered voters.
The primary issue here is whether Executive Order 141, which directs the Department of Public Service (Department) to certify the establishment of a Citizens' Utility Board (CUB), violates the principle of separation of powers under the New York State Co nstitution. Because I conclude that it does, I dissent and vote to affirm the order of the Appellate Division.
On January 3, 1991, Governor Mario Cuomo issued Executive Order No. 141 (9 NYCRR 4.141), providing for the creation of a single statewide Citizens Utility Board, certified by the Department of Public Service, as a private not-for-profit corporation representing the interests of New York State residenti al utility customers in the regulatory process. The Executive Order declared, inter alia, "[I]t is the policy of this State to foster and encourage citizen participation in utility matters and to facilitate effective representation and advocacy of the in terests of residential utility customers in the regulatory process . . .". An interim Board of Directors was to be created pursuant to procedures established by the Department of Public Service. Executive Order 141 provided that the CUB was to include i ts literature in mailings made by four State agencies annually for three years after the election of its permanent board of directors "unless the Department of Public Service determines that additional access is necessary." Access to State agency mailing s was exclusively for dissemination of information about the CUB's purpose and activities and to solicit memberships and contributions. The CUB was required to reimburse the agencies for any increase in postage attributable to CUB's enclosures.
Paragraph 4 of the Executive Order provided for approval of the material submitted by CUB for mailing by the agency enclosing that material in its mailing. This approval was limited to a determination of whether the material was "false or misleading" an d whether it met specific requirements concerning the purpose and nature of the CUB. Any dispute involving the content of the material was to be resolved by the Department of Public Service.
In May 1991, plaintiffs Pierre Bourquin, Citizens for a Sound Economy, Inc. and Atlantic Legal Foundation, Inc. commenced an Article 78 proceeding against defendant Governor Cuomo seeking a preliminary injunction, alleging, inter alia, that Executive Ord er 141 was unconstitutional as violative of the doctrine of separation of powers. On June 10, 1991 Governor Cuomo moved to dismiss the petition, citing, inter alia, plaintiffs' lack of standing. On June 26, 1991 plaintiffs served an amended petition add ing new plaintiffs, John Faso and Glenn H. Harris, and, as an additional defendant, the Department of Public Service. On the same date plaintiffs moved for a preliminary injunction enjoining the implementation of Executive Order 141. On July 10, 1991, d efendants Cuomo and the Department moved to dismiss the petition, partially on the standing issue. On December 16, 1991 Supreme Court converted the proceeding to one for a declaratory judgment, dismissed all causes of action brought by Atlantic Legal Fou ndation on the grounds of standing, denied the preliminary injunction and vacated its stay of the implementation of Executive Order 141.
On January 27, 1992 plaintiffs filed an amended verified complaint. Subsequently, on May 15, 1992, defendant Department moved for summary judgment. Governor Cuomo apparently joined in the motion. On July 3, 1992 plaintiffs cross-moved for summary judg ment.
The same Supreme Court Justice, rejecting plaintiffs' separation of powers claim, granted defendants' motion, denied plaintiffs' cross motion and dismissed the complaint. The Appellate Division reversed the Supreme Court, granted plaintiffs' cross motion for summary judgment and declared that the enactment of Executive Order 141 violated the doctrine of separation of powers by exceeding stated legislative policy. The Appellate Division did not address the plaintiffs' contention that Executive Order 141 constituted an unconstitutional gift of state property. Defendants appeal as of right pursuant to CPLR 5601(b)(1).
Defendants contend that Executive Order 141 is consistent with the Legislature's pronounced policy of concern for and protection of residential utility consumers contained in the Public Service Law, particularly the Home Energy Fair Practices Act contain ed in Public Service Law § 30.[n 1] Defendants maintain that the creation of an organization operated by and directly responsible to consumers is embraced by the Legislature's stated policy that utility charges "be just and reasonable" (Public Service Law § § 65, 79[1], 89-b, 91) and that no change in rates should be made without public notice (Public Service Law § § 66[12][b], 80[10][b], 89-c[10][b], 92[2][a]). Defendants further maintain that the creation of the Consumer Protection Board by Article 20 of the Executive Law demonstrates the Legislature's policy of fairness to consumers.
Plaintiffs contend that Executive Order 141 violates the constitutional principle of separation of powers and that it constitutes an unconstitutional gift of state property in violation of Article VIII, § 1 of the State Constitution.
The State policy of separation of powers is embodied in the New York State Constitution. There it states, "The legislative power of this state shall be vested in the senate and assembly" (NY Const art III, § 1) and "The executive power shall be ves ted in the governor" (NY Const art IV, § 1). The Constitution charges the legislature to establish State policy and the executive to implement such policy (see, Clark v Cuomo, 66 NY2d 85; Matter of Broidrick v Lindsay, 39 NY2d 641; Matter of Fullilove v Beame, 48 NY2d 376; Under 21 v City of New York, 65 NY2d 344; see also, Health Facilities Ass'n v Axelrod, 77 NY2d 340). Nevertheless, there are times when the duties and powers of the Le gislature overlap (see, Clark v Cuomo, 66 NY2d at 185). The Executive's power to implement legislation, vested in the governor, is broad and the governor is "accorded great flexibility in determining methods of enforcement" (Matter of Broidrick v Lindsay, 39 NY2d 641, 645-646). "It is only when the Executive acts inconsistently with the Legislature, or usurps its prerogatives, that the doctrine of separation is violated" (id. at 189).
We have previously held that the doctrine of separation of powers was not violated where the executive action was a clear implementation of State legislative policy (see, Health Facilities v Axelrod, 77 NY2d 340; Clar k v Cuomo, 66 NY2d 185). On the other hand, we have concluded that the doctrine was violated by executive action which went beyond the legislative policy or enforcement directives (Boreali v Axelrod, 71 NY2d 1 [Public Health Council improperly promulgated a comprehensive smoking code for areas open to the public]; Under 21 v City of New York, 65 NY2d 344 [Mayor of the City of New York could not promulgate an executive order prohibiting employment discrimination on the basis of sexual ori entation in City contracts where the Legislature had not adopted such a policy]; Rapp v Carey, 44 NY2d 157 [Governor could not promulgate an executive order requiring executive branch employees to file financial disclosure forms and to refrain from certain political and business activities where the legislature had not adopted such a policy]; Matter of Broidrick v Lindsay, 39 NY2d 641 [New York City Deputy Mayor-City Administrator could not mandate certain minority percentages in City constr uction contracts absent legislative authorization]).
The Legislature's policy favoring the protection of residential consumers does not translate into legislation authorizing the creation of a private not-for-profit corporation with authority to speak on behalf of all residential utility customers. By this Executive Order, the Governor has effectively fashioned public policy in an area where the Legislature has not yet acted, clearly exceeding his authority and violating the pr inciple of separation of powers.
As defendant concedes, the Legislature has expressed its desire that the interests of residential consumers be protected in the area of utilities. To this end, the Legislature has established the Consumer Protection Board which functions primarily to pr otect consumer interests. Further, the Office of the Attorney General and the Public Service Commission, the rate setting body within the Department of Public Service, are similarly charged to protect consumer interests in Public Service Commission proce edings. Nevertheless, such express legislative policy is insufficient authority for the certification of a single, statewide CUB with access to State mailings.
Defendant's reliance on Clark v Cuomo (66 NY2d 185) and New York State Health Facilities Association, Inc. (NYSHFA) v Axelrod (77 NY2d 340) to support his contention that Executive Order 141 furthers the Legislature's policy of protecting residential utility consumers' interes t is unpersuasive. What differentiated Executive Order 141 from the executive order we sustained in Clark v Cuomo (66 NY2d 185) and the regulations we approved in New York State Health Facilities Assoc. v Axelrod (77 NY2d 340) is precisely the lack of the much narrower and more precise statement of legislative policy that supported our determination in those two cases. In creating the voter registration task force at issue in Clark v Cuomo, the Governor no t only relied on Election Law § 3-120(13), which stated that the board of elections had the power and duty "to encourage the broadest possible voter participation in elections," but also on the more particularized provision of Election Law § 5-1 20(2) that the county boards of elections were required to see that voter registration forms were "as widely and freely distributed as possible" (66 NY2d at 190). Similarly, in New York State Health Facilities, the Public Health Council's promulga tion of regulations requiring for-profit nursing homes to admit a "reasonable percentage" of Medicaid patients was supported not only by the general principles expressed in sections 363 and 364 of the Social Services Law, that providing medical assistance to the needy is "a matter of public concern" and that the Department of Health is "responsible for establishing and maintaining standards [for nursing homes]", but by the specific requirement of Public Health Law § 2801-a(9)(d) that profit-making nu rsing homes "not discriminate because of * * * sponsor in admission or retention of patients" (77 NY2d at 347-348).
The specific ways in which the executive order establishes state policy are (1) by authorizing a new remedy for consumer involvement in utility rate setting through the establishment of a private corporation, whose interim board is created pursuant to pr ocedures of the Department of Public Service, with access to State agency mailings to solicit members and financial contributions and (2) by involving State agencies in the approval of the content of communications, (through a determination of whether it is false or misleading) sent to State residents by a private entity. Since such actions have not been adopted by the State Legislature, they violate the doctrine of separation of powers (see, Boreali v Axelrod, supra; Under 21 v City of New York, supr a; Rapp v Carey, supra; Matter of Broidrick v Lindsay, supra).
Accordingly, I dissent and vote to affirm the order of the Appellate Division.
F O O T N O T E
1. In PSL § 30, the Legislature "declared to be the policy of this state that the continued provision of gas, electric and steam service to residential customers without unreasonable qualifications or lengthy delays is necessary for the preservation of the health and general welfare and is in the public interest."
Order reversed, with costs, defendants' motion for summary judgment granted, plaintiffs' cross motion for summary judgment denied and judgment granted declaring that Executive Order No. 141 is constitutional. Opinion by Chief Judge Kaye. Judges Titone, Levine and Ciparick concur. Judge Smith dissents and votes to affirm in an opinion in which Judges Simons and Bellacosa concur.
Decided June 13, 1995