Matter of Comptroller of the City of New York v. Bloomberg, 6 N.Y.3d 254 (2006)
The term “property” in New York City Charter § 362(a), defining “concession,” is not limited to real property but includes intangible property, and the City Comptroller’s power to review contracts under § 328(b)(ii) is limited to ensuring proper certification, not to conducting a substantive investigation of the contract’s 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 City Comptroller challenged the contract’s validity, arguing that the City failed to obtain proper approval for the marketing portion of the agreement and that the term “property” in the City Charter should include intangible assets like intellectual property. The Court of Appeals held that “property” includes intangible assets but limited the Comptroller’s review power to ensuring proper certification, preventing him from delving into the contract’s substantive aspects. This decision clarifies the scope of the Comptroller’s authority and the definition of “property” in the context of City concession contracts.
Facts
In 2003, New York City created the Marketing Development Corporation (MDC) to develop public-private partnerships. The City, MDC, and the Department of Citywide Administrative Services entered into a concession contract with Snapple Beverage Corporation. The contract involved Snapple selling beverages in vending machines on City property and marketing the City’s brand. The City presented only the vending portion of the contract to the New York City Franchise and Concession Review Committee (FCRC) for approval. The Comptroller objected, arguing that the entire contract should have been submitted to the FCRC.
Procedural History
The Comptroller brought a combined special proceeding (Article 78) and declaratory judgment action, seeking to annul the contract. Supreme Court rejected the Comptroller’s challenge. The Appellate Division affirmed, concluding that the Comptroller could only object to the certifications’ existence, not the underlying process, and that “property” included intangible assets. The Court of Appeals affirmed the Appellate Division’s order.
Issue(s)
1. Whether the statute of limitations bars the Comptroller’s claim that the contract is invalid because it could not be registered properly under Charter § 328.
2. Whether the term “property” in Charter § 362(a) is limited to real property.
3. Whether the Comptroller, under Charter § 328(b)(ii), can transform a procedure for registering a contract into a substantive investigation of a contract.
Holding
1. No, because the agency determination became “final and binding” no earlier than February 20, 2004, the date the City filed the contract with the Comptroller for registration.
2. No, because under settled statutory interpretation principles, the term “property” in Charter § 362 (a) is not limited to “real property.”
3. No, because the Comptroller may not, under Charter § 328 (b) (ii), transform a procedure for registering a contract into a substantive investigation of a contract.
Court’s Reasoning
The Court of Appeals held that the statute of limitations began to run when the City filed the contract with the Comptroller for registration. As to the definition of “property,” the Court relied on the plain language of Charter § 362(a), which defines “concession” as a grant for the private use of city-owned “property.” The Court noted that the term “property” is not qualified by “real,” “personal,” “tangible,” or “intangible.” The Court emphasized that when the drafters of the Charter intended to refer to “real property,” they explicitly used those words. For example, § 362(d) uses the term “real property” in contrast to “inalienable property.” The Court reasoned that the drafters’ decision not to use “real property” in § 362(a) indicated that they did not intend such a narrow construction.
Regarding the Comptroller’s authority, the Court held that under § 328(b)(ii), the Comptroller may deny registration only if “a certification required by [section 327] has not been made.” The Court stated that § 328(b)(ii) does not empower the Comptroller to second-guess facially sufficient certifications provided by the Mayor and the Corporation Counsel. The Court reasoned that the Charter’s delegation of duties plainly establishes that the Mayor and Corporation Counsel bear the responsibility for determining that procedural requirements have been met and that legal authority exists to award a concession contract. The Court directly quoted Hudson Riv. Tel. Co. v Watervliet Turnpike & Ry. Co., 135 NY 393, 403-404 (1892), stating “[t]he words of the statute are to be interpreted according to their natural and obvious meaning, and, as the terms employed are not ambiguous, extrinsic facts are not available to restrict the authority which it plainly confers.” The Court concluded that allowing the Comptroller to conduct a substantive investigation would undermine the Charter’s intended allocation of responsibilities.