7 N.Y.3d 256 (2006)

The term “property” in New York City Charter § 362(a), defining “concession,” encompasses both tangible and intangible property, and the Comptroller’s authority to review contracts is limited to verifying the existence of required certifications, not the underlying process.

Summary

This case concerns a dispute over a concession contract between New York City and Snapple, where Snapple would sell beverages in vending machines on city property and market the city’s brand. The Comptroller challenged the contract, arguing that the marketing aspect wasn’t properly submitted for approval. The court addressed whether the term “property” in the City Charter includes intangible property and the scope of the Comptroller’s review authority. The Court of Appeals held that “property” includes both tangible and intangible forms, but the Comptroller’s review is limited to ensuring the existence of required certifications, not investigating the process behind them.

Facts

In 2003, New York City created the Marketing Development Corporation (MDC) to develop public-private partnerships. The City entered a concession contract with Snapple, involving vending machines on city property and Snapple marketing the city’s brand. Only the vending portion was initially presented to the Franchise and Concession Review Committee (FCRC) for approval. The Comptroller objected to the contract’s registration, arguing that the full contract wasn’t submitted for approval.

Procedural History

The Comptroller sought to annul the contract, arguing it was invalid due to procedural defects and that the definition of “concession” includes intangible property. The Supreme Court ruled against the Comptroller, finding the entire contract had been filed and that the Comptroller couldn’t attack only part of it. The Appellate Division affirmed, stating the Comptroller could only object to the existence of certifications, not the underlying process. The case then went to the Court of Appeals.

Issue(s)

1. Whether the term “property” in New York City Charter § 362(a) is limited to real property or encompasses intangible property.

2. Whether, under New York City Charter § 328(b)(ii), the Comptroller has the authority to investigate the process by which the City reached the agreement with Snapple, or is limited to verifying the existence of required certifications.

Holding

1. Yes, because the plain language of the statute defines “concession” as a grant for the private use of city-owned “property” without limiting it to real property; when the drafters intended to refer to real property, they explicitly used that term elsewhere in the Charter.

2. No, because Charter § 328(b)(ii) only allows the Comptroller to verify that the certifications required by § 327 have been made, not to second-guess the validity of those certifications or investigate the underlying process.

Court’s Reasoning

The Court first addressed the statute of limitations, determining the claim related to the Comptroller’s role as an FCRC member was time-barred but the claim related to the contract’s registration was not. Regarding the definition of “property,” the Court emphasized the importance of adhering to the plain meaning of the statutory text. The Court noted that the Charter drafters used the term “real property” in other sections when that was their intent, suggesting the omission of that qualifier in § 362(a) was deliberate. The court quoted from Hudson Riv. Tel. Co. v Watervliet Turnpike & Ry. Co. (135 NY 393, 403-404 [1892]) that statutes should be interpreted according to their natural meaning and should encourage progress, not restrict it. The Court rejected the Comptroller’s argument that he could investigate the underlying process of the contract award. It determined that Section 328(b)(ii) of the Charter only allows the Comptroller to deny registration if the certifications required by Section 327 were not made. The court reasoned that the Charter delegates the responsibility of ensuring procedural requirements are met to the Mayor and Corporation Counsel, not the Comptroller. Therefore, the Comptroller’s role is limited to verifying the existence of the certifications, not evaluating their accuracy. The Court emphasized that the plain language of the statute is determinative. The Court observed, “The delegation of duties set forth in the relevant provisions of the Charter establishes in plain language that the Mayor and the Corporation Counsel— not the Comptroller—bear the burden of determining that procedural requirements have been met and legal authority exists to award a concession contract.”