Constitutional Law - Validity of Statute - Legislative Law § 5-b - Compliance with Outside Earned Income Restrictions as Condition Precedent to Voting Rights Deemed Unconstitutional

Lippes Mathias Wexler Friedman LLP, Buffalo, for plaintiffs.

Letitia James, Attorney General, Happauge, for New York State and others, defendants.

Mackenzie Hughes LLP, Syracuse, for Robert Ortt and another, defendants.

In this proceeding the plaintiffs move for an order directing{**86 Misc 3d at 774} summary judgment in their [*2]favor declaring New York Legislative Law § 5-b unconstitutional, invalid, and unenforceable. The defendants, excluding Senate Minority Leader Robert Ortt and Assembly Minority Leader William Barclay, oppose this application in all respects and cross-move pursuant to CPLR 3212 for summary judgment dismissing the complaint in its entirety. The named minority defendants Senate Minority Leader Robert Ortt and Assembly Minority Leader William Barclay (minority defendants) submitted papers in support of the plaintiffs' motion and in opposition to dismissing the complaint.

On December 22, 2022, the New York Legislature passed Senate Bill S9617 and on December 31, 2022, Governor Kathy Hochul signed the bill into law thereby amending Legislative Law § 5 and adding Legislative Law § 5-b. (L 2022, ch 841, §§ 1, 2.) This new law increased the legislators' annual salary from $110,000.00 to $142,000.00 per year effective January 1, 2023. The second portion of this law was set to take effect January 1, 2025, and created a limitation on the "wages, salaries, fees and other forms of compensation for services actually rendered" (outside income) that New York State legislators can earn in addition to their legislative salaries. (Legislative Law § 5-b [2] [a].) The limit on outside income is capped at $35,000.00 per year in accordance with the amount set by Retirement and Social Security Law § 212 (2). Legislative Law § 5-b limiting outside income for legislators reads as follows:

"1. Effective January first, two thousand twenty-five a member of the legislature receiving a salary for legislative work from the state of New York shall be permitted to earn outside income each year for performing fee for service activities and compensated outside activities approved under the permanent joint rules of the Senate and Assembly in an amount totaling no greater than the earning limitations for retired persons in positions of public service allowed for the same year under subdivision two of section two hundred twelve of the retirement and social security law. . . . [C]ompliance with the limit on outside earned income described in this section shall be a condition precedent to receiving a salary for legislative activities from the state of New York, and voting as a member of the legislature of the state of New York.{**86 Misc 3d at 775}

"2. a. For purposes of this section, the term 'outside earned income' shall mean wages, salaries, fees and other forms of compensation for services actually rendered.

"b. For the purposes of this section, the term 'outside earned income' shall not include:

"(1) salary, benefits and allowances paid by the state;

"(2) income and allowances attributable to service in the reserves of the armed forces of the United States, national guard or other active military service;

"(3) copyright royalties, fees, and their functional equivalent, from the use of copyrights, patents and similar forms of intellectual property rights, when received from established users or purchasers of such rights;

"(4) income from retirement plans of the state of New York or the city of New York, private pension plans or deferred compensation plans (e.g., 401, 403(b), 457, etc.) established in accordance with the internal revenue code;

"(5) income from investments and capital gains, where the member's services are not a [*3]material factor in the production of income;

"(6) income from a trade or business in which a member of their family holds a controlling interest, where the member's services are not a material factor in the production of income; and

"(7) compensation from services actually rendered prior to January first, two thousand twenty-five, or prior to being sworn in as a member of the legislature.

"3. . . . [A] member of the legislature who knowingly and intentionally violates the provisions of this section shall be subject to a civil penalty in an amount not to exceed forty thousand dollars and the value of any gift, compensation or benefit received in connection with such violation. Assessment of a civil penalty shall be made by the legislative ethics commission."

The plaintiffs seek a declaratory judgment annulling the law and argue that the law (1) violates the Equal Protection Clauses of the US Constitution and New York State Constitution;{**86 Misc 3d at 776} (2) violates article III, § 7 of the New York State Constitution; (3) violates the Due Process Clause of the US Constitution and New York State Constitution; (4) disenfranchises voters; (5) violates article III, § 6 of the New York State Constitution; (6) violates the First and Fourteenth Amendments of the US Constitution as it pertains to the legislator plaintiffs; and (7) violates the First and Fourteenth Amendments of the US Constitution as it pertains to the constituent plaintiffs.

The defendants argue in favor of the law citing that the curtailing of outside income falls within the legitimate interest of the legislature to "prevent conflicts of interest and ethical dilemmas rising from legislators' outside earned income." The defendants reiterate this argument by stating that "[t]he purpose of the limit is not so much to allow legislators to devote more or less time to legislative versus non-legislative activities, but to reduce the risk of conflicts of interest and ethical dilemmas." The defendants also maintain that the law is constitutional on its face and that "courts should not second-guess the Legislature's judgment as to the necessity of a law designed to discipline its members and protect its integrity and esteem."

The plaintiffs assert that the law does not achieve its purported purpose of curtailing conflicts of interest as the law arbitrarily puts a limit on the amount earned and not the source of the income. They argue that there currently stands a number of mechanisms by which to monitor and identify conflicts of interest and properly adjudicate any conflict issues that may arise. The plaintiffs underscore the argument that the statute serves no legitimate state interest by contending that

"Legislative Law § 5-b (2) (b) specifically excludes from the definition of outside income—and therefore, the $35,000 outside income cap—from government sources, retirement income, investment income, and passive income from a trade or business. All other income is capped, regardless of all conceivable lack of any conflict of interest. All of the plaintiffs currently serving in the Legislature earn outside income from their part-time [*4]private sector employment have received written confirmation from the Legislative Ethics Commission that their outside income does not present any conflict of interest, and yet still face the loss of voting privileges that no other State Legislators face."{**86 Misc 3d at 777}

The plaintiffs state that the statute is ambiguous, deprives citizens of New York State of rights and privileges conferred by the Constitution, "is an unconstitutional de facto amendment to the New York Constitution without any regard to constitutional amending procedures" and "unlawfully treats Legislator Plaintiffs and their constituents, has an illegitimate purpose, is not supported by a compelling or important state interest, and has no rational basis in relation to any legitimate purpose." Specifically related to the penalization of violating the law, the plaintiffs point out that "Legislative Law § 5-b does not call for a legislator to be removed from office, thereby creating a vacancy to be filled by special election; rather it strips a legislator's ability to vote, rendering him or her irrelevant and ineffective . . . constituents are effectively disenfranchised and rendered voiceless."

In opposition, the defendants contend that "[t]he statute does not prohibit a disciplined member from performing legislative functions other than voting: a member may introduce bills, debate, question, speak on legislation before the house, hold hearings, negotiate with the executive branch, and meet with or advocate for constituents." The defendants argue that the "sanctions are reasonable and necessary to ensure compliance, and both voters and those wishing to serve as legislators are on notice of them." The court notes that a case dealing with the constitutionality of the Commission on Ethics and Lobbying in Government (COELIG), the commission responsible for the investigation and enforcement of the subject law at issue, was recently determined by the New York State Court of Appeals on February 18, 2025 (Cuomo v New York State Commn. on Ethics & Lobbying in Govt., — NY3d —, 2025 NY Slip Op 00902 [2025]). The Court of Appeals reversed the orders of the lower courts and upheld the constitutionality of the Ethics Commission Reform Act.

At the outset, it should be noted that placing outside income restrictions on duly elected officials is not a novel concept. In 1977, the legislative arm of the federal government initiated a restriction on outside income to curb the appearance of impropriety and aid in boosting public confidence and trust in government officials (see Comm on Admin Rev, Fin Ethics, HR Doc No. 95-73, 95th Cong, 1st Sess 10 [1977]). Subsequently, in 1989, Congress implemented additional restrictions so as to assure the public that members do not use their positions for personal gain and that their outside activities do not detract{**86 Misc 3d at 778} from a member's ability to carry out his or her duties as an elected official (see Bipartisan Task Force Rep, 12 note 8, 135 Cong Rec H9256).

It is well settled that the proponent of a summary judgment motion bears the initial burden of establishing his or her entitlement to judgment, as a matter of law, in his or her favor by offering admissible evidence sufficient to eliminate any material issues of fact from the case (see Alvarez v Prospect Hosp., 68 NY2d 320 [1986]; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851 [1985]; Zuckerman v City of New York, 49 [*5]NY2d 557 [1980]). Failure to make such a showing requires denial of the motion, regardless of the sufficiency of any opposition thereto (Winegrad v New York Univ. Med. Ctr.). Once the movant has made the requisite showing, the burden then shifts to the opposing party, requiring him or her to present admissible evidence and facts sufficient to require a trial on any issue of fact (CPLR 3212 [b]; Alvarez v Prospect Hosp.; Zuckerman v City of New York). On such a motion, the court is charged with determining whether issues of fact exist while viewing any evidence in a light most favorable to the nonmoving party; the court is not responsible for resolving issues of fact or determining matters of credibility (see Chimbo v Bolivar, 142 AD3d 944 [2d Dept 2016]; Pearson v Dix McBride, LLC, 63 AD3d 895 [2d Dept 2009]; Kolivas v Kirchoff, 14 AD3d 493 [2d Dept 2005]). A motion for summary judgment should be denied where the facts are in dispute, where conflicting inferences may be drawn from the evidence, or where there are issues of credibility (see Chimbo v Bolivar; Benetatos v Comerford, 78 AD3d 750 [2d Dept 2010]).

The Court of Appeals in Silver v Pataki (96 NY2d 532, 542 [2001]) held that "courts will always be available to resolve disputes concerning the scope of that authority which is granted by the Constitution to the other two branches of the government" (New York State Bankers Assn. v Wetzler, 81 NY2d 98, 102 [1993], quoting Saxton v Carey, 44 NY2d 545, 551 [1978]; see also Matter of King v Cuomo, 81 NY2d 247, 251 [1993]). "The capacity and standing of an individual legislator to seek judicial redress in these circumstances is essential to protect the separation of powers and rights of the Legislative branch" (Silver v Pataki at 542). The Silver Court goes on to state, "We only confirm what was assumed before: in limited circumstances, legislators do have capacity and standing to sue when conduct unlawfully interferes with or usurps their duties as{**86 Misc 3d at 779} legislators" (id.). However, in Monserrate v New York State Senate (599 F3d 148, 157 [2d Cir 2010]), the Second Circuit Court of Appeals notes that "[p]rudence dictates that a federal court should exercise a respectful reluctance to interfere in the measures taken by a state legislature to regulate its affairs, discipline its members, and protect its integrity and good name" (emphasis added). The court goes on to discuss New York Legislative Law § 3 which provides that "[e]ach house has the power to expel any of its members, after the report of a committee to inquire into the charges against him shall have been made." The Monserrate court likewise highlights the comparative federal language in the United States Constitution, article I, § 5, clause 2, which provides that "[e]ach House may determine the Rules of its Proceedings, punish its Members for disorderly Behaviour, and, with the Concurrence of two thirds, expel a Member." It is apparent to this court that a central element to the effective operation of our democratic republic is a legislative body's autonomy to "self-police" as it sees fit. Just as the federal courts should exercise a "respectful reluctance" to interfere with a state legislature's self-regulation, so too should this court respect the doctrine of separation of powers and its integral role in the success of our government.

The instant action before us comes after the subject legislation was introduced on the floor of the New York State Legislature, opened up to debate, the minutes of which were reviewed by this court, and voted on in both chambers. Members of both represented political [*6]parties voted against the measure, but the bill was passed with a 33-23 vote in the Senate and an 84-47 vote in the Assembly.

Upon a review of all the documents submitted in connection with these instant motions, the court finds that, as the legislature is vested with the inherent authority to "self-police" and discipline its members, the portion of the law dealing with outside income restrictions on members of the state legislature and the civil penalties against an individual legislator for the willful violation of such restrictions is constitutional. The plaintiffs have failed to establish their entitlement to summary judgment for a declaratory judgment as a matter of law on the first, second, third, fifth and sixth causes of{**86 Misc 3d at 780} action. The defendants' motion for summary judgment dismissing the plaintiffs' complaint in its entirety is granted in part to the extent that the defendants have established their entitlement to summary judgment on the first, second, third, fifth and sixth causes of action. In opposition, the plaintiffs have failed to raise a triable issue of fact as to the constitutionality of the law that was passed by a majority in both chambers of the New York State Legislature following an open debate and floor vote.

The remaining causes of action (fourth and seventh) before this court relate to the constitutionality of the voting consequences attached to this legislation. Per this penalty portion of the law, compliance with the limit on outside earned income shall be a condition precedent to voting as a member of the legislature of the State of New York. In accordance with the law as is, should a member violate the outside income restrictions they are stripped of their privilege to vote on matters as a duly elected member of the legislature.

Central to this nation's government is the right to vote. The function of our democratic republic is to ensure a government "of the people, by the people, for the people." In the House Rules and Manual of Congress it states that "[t]he weight of authority also favors the idea that there is no authority in the House to deprive a Member of the right to vote" (see House Rules & Manual, HR Doc No. 118-187, 118th Cong, § 672 [2025] [emphasis added]). This principal underscores the importance of voting and the right to representation in our governmental process. In relation to the income restriction legislation currently before this court, the constituent plaintiffs opine that the penalty of stripping a representative member's voting privilege indefinitely upon a finding of violating the income restriction unconstitutionally deprives constituent voters in New York of their right to be represented in state government.

In opposition, the defendants argue that the statute does not violate the constitutional rights of plaintiff constituents. The defendants claim that "only when voting rights are subject to severe restrictions must the regulation be narrowly drawn to advance a compelling state interest" citing Burdick v Takushi (504 US 428, 433-434 [1992]). Additionally, they cite Monserrate v New York State Senate (599 F3d 148, 157 [2d Cir 2010]), a case in which a member was expelled and the constituents were left without representation until a special election was held. The defendants argue that, in the present case,

"any burden on voting rights is minimal, and would be wholly attributable to the actions of the legislator who made the choice to violate the outside income limitations. That result would be similar to scenarios in which legislators choose not to attend{**86 Misc 3d at 781} [*7]one or more legislative sessions, thus depriving their constituents of a voice in the legislature."

The defendants claim that members can still take part in discussions and other legislative activities apart from voting. The defendants concede, however, that the precise duration of any suspension of voting privileges is unknown. The court finds the indefinite suspension of voting rights to be drastically different than the expulsion scenario highlighted by the defendants. In a situation where a member is expelled, there is an opportunity for the represented constituents to hold a special election and replace the expelled member with another representative of their choosing thus ensuring the constituents' representation in legislative matters put to a vote. In contrast, the legislation before us provides no expiration date on the voting penalty and no recourse for a voting constituent left unrepresented for an indefinite amount of time. Conceivably, voting constituents could be left without fair representation for the entirety of the two year term of the member in violation. The court finds this to be a severe burden on voting rights. It is also significant that, in addition to the indefinite suspension of a member's voting rights, any notice requirement to the constituents is notably absent from the legislation. The court questions how a voting constituent would even be informed that they are unrepresented in the event of a member's suspension based on a violation of the outside income restriction. Upon a review of the papers, the court finds the narrow portion of the law specifically dealing with the suspension of voting rights of a member to be unconstitutional. The plaintiffs have established their right to summary judgment as a matter of law as it pertains to the adherence to the outside income restrictions as a condition precedent to voting rights and subsequent suspension of those voting rights should a member be found in violation of Legislative Law § 5-b. The defendants have failed to raise a triable issue of fact as it pertains to this narrow portion of the law. Accordingly, the court finds the language "compliance with the limit on outside earned income described in this section shall be a condition precedent to . . . voting as a member of the legislature of the state of New York" (Legislative Law § 5-b [1] [emphasis added]) to be unconstitutional.

It is ordered that the plaintiffs' first, second, third, fifth, and sixth causes of action are dismissed; it is further ordered that the specific portion of the legislation aforementioned dealing with the voting rights of members is unenforceable and shall be stricken from the law.