Lack of Standing Is Fatal To Challenge

April 23, 2018

Standing is a threshold issue in challenges to administrative decisions.  Prior blog posts have dealt with standing in cases involving challenges to local land use and zoning decisions.  If standing is not established, the party seeking to overturn the administrative decision will see its proceeding dismissed without any consideration of the merits.  Whether a party has standing is quite fact-sensitive but there are certain overarching principals that should be remembered.  Most notably, a petitioner must show in its pleadings that it suffered a harm that is different from the harm suffered by the general public, that the harm is within the zone of interest sought to be protected by the applicable statute, and that the alleged harm is not speculative.

Late last month, the Appellate Division, Third Department, issued two companion decisions that caught our “standing” attention. While the cases involve a challenge to a loophole in the Election Law for limited liability companies, referred to as the LLC Loophole, the matters were resolved on the basis of the lack standing of the petitioners.  In these cases, petitioners raised interesting arguments that they thought would support their standing to challenge an administrative decision, but the Court found them unpersuasive.  The Court’s evaluation of the standing claims may be helpful to those seeking to establish or to defeat standing in the land use and zoning matters.

The Facts     

According to the decisions,  Brennan Center For Justice v. NYS Board of Elections (Docket 524905) and Brennan Center For Justice v. NYS Board of Elections (Docket 524950), petitioners were the Brennan Center For Justice at NYU Law School (the “Brennan Center”), a self-described “not-for-profit, non-partisan public policy and law institute that focuses on issues of democracy and justice” and six individual petitioners who were current or former legislators or candidates for legislative office. Respondent, the New York State Board of Elections, (“Board of Elections”), was described in the decisions as “a bi-partisan agency governed by four appointed commissioners and vested with the statutory authority to issue instructions, rules and regulations pertaining to campaign financing practices, among other things.”

New York State’s Election Law contains provisions that limit campaign contributions for various types of donors.  When limited liability companies were authorized in New York in 1994, the Legislature did not amend the Election Law to address campaign limits for this type of entity. In 1996, the Board of Elections issued an opinion that treated limited liability companies as individuals for purposes of campaign contribution limits. This allowed limited liability companies to donate larger amounts to campaigns than corporations or partnerships could donate. While there were efforts legislatively to close the LLC Loophole, none were successful.

In April 2015, one of the commissioners of the Board of Elections sought to close the LLC Loophole by making a motion to direct the board’s counsel to rescind the 1996 opinion and provide guidance on limits that should apply to contributions by limited liability companies. The motion failed, whereupon the Petitioners sought review in a hybrid Article 78 proceeding and declaratory judgment action (“Hybrid Proceeding”). The Supreme Court dismissed the Hybrid Proceeding, which the Appellate Division affirmed in one of the companion decisions.

In April 2016, one of the commissioners made a new motion seeking approval of a draft opinion that would rescind the 1996 opinion and replace it with an opinion that treated limited liability companies in the same manner as partnerships and corporations with respect to campaign contribution limits. This motion also failed. Petitioners commenced another Hybrid Proceeding seeking to invalidate what the Board of Elections did in April 2016 and to replace the 1996 opinion with the 2016 draft opinion. The Supreme Court dismissed the second action, and the Appellate Division affirmed in the second companion decision.

The Appellate Division Decisions

In both cases, the Appellate Division found that the individual petitioners lacked standing. The appellate court found that their claims of harm – that the LLC Loophole “hampers their electoral campaigns by placing them at a competitive disadvantage against opponents who receive large contributions,” “damages their ability to represent their constituents,” harms the voters by “limiting their choices among candidates and hiding the identity of donors,” and “would cause them to suffer disadvantages in future elections” did not confer standing. The court found all these claims to be neither different nor distinct from those of the public at large and were also conjectural.

Similarly, the appellate court found that the Brennan Center lacked standing. The Brennan Center claimed the LLC Loophole “harms its staff contributors and volunteers by limiting their candidate choices and unduly influencing their political representatives.” The appellate court found that this alleged harm was no different than the harm suffered by the general public and did not support standing. The appellate court also rejected the Brennan Center’s claim that it was injured by having to advocate for the closure of the LLC Loophole, which required it to expend resources. The majority also noted that petitioners could not establish standing by claiming that the LLC Loophole caused disparities in campaign contributions, wryly noting that the “[o]ur political system does not mandate equal funding for all candidates.”

The Appellate Division also found that the courts were not the appropriate place to fix the LLC Loophole. Rather, it “resolved around policy choices and value determinations constitutionally committed to the legislative and executive branches.”

Moral Of The Story

As to the applicability of these decisions to Land Use and Zoning – the bottom line is never forget “standing.”  It is a fundamental element that must be established by petitioners and a fundamental defense that should be considered and raised, if applicable, by respondents, in challenges to governmental actions. As noted in the decisions and in the introductory paragraphs, above, petitioners must show “that they have suffered an injury-in-fact and that the injury is within the zone of interest protected by the statute at issue.” Otherwise they will be found to lack standing and will be unable to challenge a determination on the merits.