Worth Construction Co. v. Hevesi, 8 N.Y.3d 514 (2007)
When a public corporation requests it, the State Comptroller has the discretionary authority under Article X, § 5 of the New York Constitution to review and approve contracts executed by that entity, as part of the Comptroller’s supervision of the corporation’s accounts.
Summary
Worth Construction Co. bid on a Thruway Authority project and was initially deemed the lowest responsible bidder. However, concerns arose about Worth’s ties to organized crime, leading the Authority to request the Comptroller’s review and approval of the contract. The Comptroller, after his own investigation, determined Worth to be a non-responsible bidder and disapproved the contract. Worth challenged the Comptroller’s authority. The New York Court of Appeals held that, at the request of a public corporation like the Thruway Authority, the Comptroller has the discretion under Article X, § 5 of the New York Constitution to review and approve contracts executed by that entity as part of their supervisory role over the accounts of public corporations.
Facts
In 2004, Worth Construction Co. was the apparent low bidder for a New York State Thruway rehabilitation project. The Thruway Authority investigated Worth’s “responsibility” and found possible ties to organized crime and a federal bribery investigation involving one of Worth’s principals. Worth hired an independent monitor; the Authority then deemed Worth the “lowest responsible bidder.” The contract included a clause requiring State Comptroller approval. The Authority forwarded the contract to the Comptroller, who also investigated Worth’s responsibility. The Comptroller disapproved the contract due to concerns about Worth’s responsibility as a contractor, and the Authority rescinded the contract award.
Procedural History
Worth initiated a CPLR article 78 proceeding against the Authority and the Comptroller, seeking to vacate the Comptroller’s non-responsible bidder determination and compel the Authority to proceed with the contract. Supreme Court dismissed the petition, upholding the Comptroller’s authority. The Appellate Division affirmed. Worth appealed to the New York Court of Appeals.
Issue(s)
Whether the State Comptroller exceeded his constitutional authority under Article X, § 5 of the New York Constitution by making a determination of non-responsibility with respect to a contract of the New York State Thruway Authority, when the Authority requested the Comptroller’s review and approval.
Holding
No, because when a public corporation requests it, the State Comptroller has the discretionary authority under Article X, § 5 of the New York Constitution to review and approve contracts executed by that entity as part of their supervisory role over the accounts of public corporations.
Court’s Reasoning
The Court of Appeals relied on Article X, § 5 of the New York Constitution, which states that “[t]he accounts of every…public corporation…shall be subject to the supervision of the state comptroller.” The court stated that the Comptroller’s role is to provide “an independent oversight of [public corporations’] accounts” (Patterson v Carey, 41 NY2d 714, 725 [1977]). The court emphasized that, unlike the Comptroller’s powers over state entities (governed by Article V), the legislature cannot limit the Comptroller’s authority over public corporations. This authority is discretionary and governed by the Comptroller’s individual responsibility and oath of office. The Court analogized to its prior holding in Matter of McCall v Barrios-Paoli, 93 NY2d 99 (1999), which addressed the Comptroller’s supervisory powers over political subdivisions under Article V, § 1. The Court stated that the Comptroller’s power extends to inquiring into the “efficiency and effectiveness” of a public corporation’s expenditure of its own funds where, as here, the public corporation expressly requests the Comptroller’s oversight. The court noted that the Authority deemed it prudent for the Comptroller to investigate Worth’s responsibility, but retained the right to disregard the Comptroller’s disapproval. “Although the Comptroller was permitted to conduct some oversight concerning Worth’s responsibility as a contractor, the ultimate determination in that regard rested with the Authority.”