Forti v. New York State Ethics Commission, 75 N.Y.2d 536 (1990)

Ethics laws restricting former government employees’ activities after leaving public service (so-called “revolving door” provisions) are valid if they serve a rational purpose, even if applied to those who left service before the law’s enactment, and distinctions between executive and legislative employees are permissible based on institutional differences.

Summary

This case concerns the application and constitutionality of New York’s Ethics in Government Act of 1987, specifically its “revolving door” provisions restricting the post-employment activities of former state employees. Several former state officers and employees challenged the Ethics Commission’s opinion that the new restrictions applied to them, even though they had left state service before the Act’s effective date. The plaintiffs argued the law violated equal protection and due process. The Court of Appeals upheld the Commission’s opinion and the law’s constitutionality, finding a rational basis for the restrictions and disparate treatment between executive and legislative employees, except for a provision granting the Ethics Commission exclusive power to initiate criminal prosecutions.

Facts

Plaintiff Forti, an attorney, left his position at the NYS Department of Environmental Conservation in September 1988 to join a private law firm. Other plaintiffs in a consolidated case (Kuttner) were also attorneys who left state service before January 1, 1989. The Ethics Commission issued Advisory Opinion 88-1 stating that the Public Officers Law § 73(8), a component of the Ethics in Government Act, applied to former executive branch employees regardless of when they left state service, as long as the post-employment activities occurred after January 1, 1989, the law’s effective date.

Procedural History

Forti sued, seeking a declaration that § 73(8) did not apply to those who left state service before 1989, or alternatively, that the law was unconstitutional. The Supreme Court initially found the law unconstitutional as applied to Forti. The Appellate Division reversed, upholding the law’s constitutionality. The Kuttner plaintiffs also sought declaratory relief and a preliminary injunction. The Supreme Court granted the injunction, but the Appellate Division reversed. Both cases were appealed to the Court of Appeals.

Issue(s)

1. Whether Public Officers Law § 73(8) applies to state employees who terminated their service before the Act’s effective date of January 1, 1989.
2. Whether the disparate treatment between former executive and legislative employees under the “revolving door” provisions violates equal protection.
3. Whether Public Officers Law § 73(8) violates due process rights by restricting professional career opportunities.
4. Whether Public Officers Law § 73(14), giving the Ethics Commission the power to refer violations for criminal prosecution, violates the separation of powers.

Holding

1. Yes, because the statute’s language and legislative intent indicate that the restrictions apply to anyone who *has served* as a state officer or employee, regardless of when their service ended. The specific exemption for legislative employees further supports this interpretation.
2. No, because the Legislature could rationally conclude that the risk of undue influence is greater for former executive branch employees, justifying stricter controls. The institutional differences between the legislative and executive branches provide a rational basis for the disparate treatment.
3. No, because the restrictions are reasonably related to the legislative goal of restoring public confidence in government and do not prevent the plaintiffs from practicing law, but merely limit their ability to engage in a specific class of cases.
4. The Court declined to rule definitively because the denial of preliminary injunctive relief in the Appellate Division did not constitute an error of law or abuse of discretion under the circumstances of the case. However, the court noted that section 73(14)’s provisions for criminal prosecutions only upon referral by the Ethics Commission are highly troublesome, and may violate separation of powers principles.

Court’s Reasoning

The court found the statute’s application to former employees was not truly retroactive because it regulated future conduct. It emphasized the legislature’s intent to tighten ethics restrictions. The court applied a rational basis test to the equal protection claim, finding that the legislature could rationally distinguish between executive and legislative employees due to the differing institutional structures and the greater potential for undue influence in the executive branch. The court noted factors such as the diffused decision-making process in the Legislature, the internal checks and balances, and the fact that each legislator is personally accountable to his or her constituency. It also noted that unlike their executive branch counterparts, legislative employees are unprotected by civil service or tenure rules and face the possibility of sudden job loss. The court found that the Ethics Commission could rationally have concluded that “an overly severe [‘revolving door’] prohibition * * * has a more punitive impact on Legislative Branch personnel than a similar ban on an Executive Branch employee.” For the due process claim, the court held that the restrictions were reasonable and did not unduly interfere with the plaintiffs’ ability to practice law. Regarding separation of powers, the court expressed concern about § 73(14), but declined to make a definitive ruling because the issue was not properly before the court in the context of the preliminary injunction appeal.