S TATE OF N E W Y OR K

S UP RE ME COURT COUNTY OF A L B A N Y
N E W Y OR K STATE UNI TED TEACHERS
by its President RI CHARD C. I ANNUZZI , NAOMI
A V E R Y , S ETH COHEN, TI MOTHY MI C HAE L EHL ERS,
K A T H L E E N TOB I N FL USSER, MI C HAE L L E X I S ,
ROB ERT P E A R L as a Parent, Individually and on behalf
of his children K Y L E I G H P E ARL , MI C AE L A P E ARL ,
A V A P E A R L and N OL A N P EARL , B R I AN PI CKFORD,
H I L A R Y STRONG as a Parent, Individually and on behalf
of her child K E V I N STRONG,
Plaintiffs,
Index No.: 963-13
-against-
The STATE OF N E W YOR K, ANDR E W M . CUOMO
as Governor ofthe State of New York, T HOMAS P.
Di NAP OL I as Comptroller ofthe State of New York,
and J OHN B . KI NG, JR., as Commissioner ofthe
New York State Education Department,
Defendants.
ME MOR A N D U M OF L A W I N SUPPORT OF
PL AI NTI FFS' MOTI ON TO A ME N D
RI CHARD E. C A S A G R A N D E , ESQ.
Attorney for Plaintiffs
Office & P.O. Address
800 Troy-Schenectady Road
Latham, N . Y . 12110-2455
Tel. No. (518)213-6000
B Y : Robert T. Reilly, Esq.
Matthew E. Bergeron, Esq.
Laura R. Hallar, Esq.
T A B L E OF CONTENTS
Page
P R E L I MI NAR Y S TATEMENT 1
A R G U ME N T
PL AI NTI FF' S MOTI ON FOR L E A V E TO
A M E N D THE COMP L AI NT SHOUL D B E GRANT E D 3
CONCL US I ON 6
STATE OF N E W Y OR K
S UP REME COURT C OUNT Y OF A L B A N Y
NE W Y OR K STATE UNI TED TEACHERS
by its President RI CHARD C. I ANNUZZI , NAOMI
A V E R Y , SETH COHEN, TI MOTHY MI C HAE L EHL ERS ,
K A T H L E E N TOB I N FL USSER, MI C HAE L L I L L I S,
ROB ERT P E A R L as a Parent, Individually and on behalf
of his children K Y L E I G H P E ARL , MI C A E L A P E AR L ,
A V A P E AR L and N OL A N P E AR L , B RI AN PI CKFORD,
H I L A R Y STRONG as a Parent, Individually and on behalf
of her child K E V I N STRONG,
Plaintiffs,
Index No.: 963-13
-against-
The STATE OF N E W Y OR K , A N D R E W M . CUOMO
as Governor ofthe State of New York, T HOMAS P.
Di NAP OL I as Comptroller ofthe State of New York,
and J OHN B . KI NG, JR., as Commissioner ofthe
New York State Education Department,
Defendants.
P RE L I MI NARY S TATEMENT
Plaintiffs submit this memorandum of law in support of their motion to amend their
complaint.
Plaintiffs commenced this action on February 20, 2013. It was initially assigned to Justice
Gerald Connolly, who shortly after recused himself. The case was then reassigned to Justice
Kimberly O'Connor. On July 3,2013 an amended complaint was filed with leave of the Court, and
defendants moved to dismiss on August 9,2013. That motion was argued before Justice O'Connor
on December 19,2013. Before she issued a decision, however, she recused herself, and the case was
reassigned in February, 2014 to Justice Eugene Devine. Justice Devine, likewise, did not issue a
decision because, on April 15, 2014 he was elevated to the Appellate Division. In sum, the
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defendants' motion to dismiss remains undecided. And, now, given recent action by the Legislature,
an election at NYS UT , and a desire to provide the court with up-to-date information, the plaintiffs
seek to amend their complaint.
Plaintiffs seek to amend their complaint to add allegations about the so-called tax freeze. On
March 31,2014, the Legislature passed a budget, later signed into law by Governor Andrew Cuomo,
enacting, among other things, the Real Property Tax Freeze Credit, known as the tax freeze. (L.
2014, ch. 59, pt. FF). As applied to school districts, the tax freeze has been codified in section 2023-
b of the Education Law, a section in pari materia with the immediately preceding section, section
2023 -a, where the Tax Cap is codified. Generally, the freeze provides a tax credit to eligible property
taxpayers in school districts that adopt budgets that do not exceed the cap. The freeze, in essence,
financially incentivizes school districts and voters to stay within the tax cap. It also effectively
punishes districts, voters, taxpayers and school children in districts where school boards and voters
exercise their constitutionally protected right to exceed the tax cap, by denying tax credits to
otherwise eligible taxpayers in such districts. This is done without regard to the current funding
effort of the disfrict or the current educational achievement or need of the district's school children.
Plaintiffs submit that the freeze's tax credits are thus, an unconstitutional disbursement of sate funds.
The new tax freeze and the tax cap are integral to one another. The overall effect ofthe freeze is to
exacerbate the funding inequities between wealthy and poor school dishicts in the State, especially
since the enactment of the tax cap. The tax cap, especially considering the new tax freeze, should
not withstand any level of judicial scrutiny.
Moreover, plaintiffs have standing under State Finance L aw 123-b to challenge the tax
freeze and the inextricably intertwined provisions ofthe tax cap. Accordingly, they also seek to
amend the complaint to include standing under that statute and to add the Commissioner of Taxation
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and Finance as a defendant.
In addition to amending their complaint to address the tax freeze, plaintiffs seek to amend the
complaint to reflect a change in the elected president of NYS UT . Richard lannuzzi is no longer
president, as Karen E. Magee was elected to serve in April of this year.
Also, plaintiffs seek to amend the complaint to bring up to date financial and statistical
information that was initially plead in February and July 2013. New information is available and
should be before the Court for its reference.
None of these proposed amendments would prejudice the defendants, and all of these
proposed amendments are timely and meritorious. Leave to amend should be freely given where, as
here, there is no substantial prejudice to the respondent.
A R G U ME N T
PL AI NTI FFS' MOTI ON FOR L E A V E TO A ME N D
THE COMP L AI NT SHOUL D B E GR ANT E D
It is settled law in this State that leave to amend a party's pleading should be freely granted
in the absence of prejudice to the opposing party. E.g., Thompson v. Alleva, 76 A.D.2d 1022 (3d
Dep' t 1980), appeal dismissed, 53 N.Y.2d 839 (1981). " A party may amend his [or her] pleading,
or supplement it by setting forth additional transactions or occurrences, at any time by leave of court
or by stipulation of all parties," and "leave shall be freely given upon such terms as may be just
including the granting of costs and continuances." CP L R 3025(b)
Plaintiffs move for permission to amend the amended complaint to correct the pleadings to
reflect a leadership change in New York State United Teachers, to update funding data, and to add
allegations regarding the recently enacted Real Property Tax Freeze Credit, including a claim under
the State Finance Law, as it directly impacts the operation of the tax cap legislation over the next two
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tax years.
A. Substitution of Plaintiffs
In addition to the liberal standard for granting amendments of pleadings under CPLR
3025(b), section 1019 ofthe CPLRprovides for an amendment ofthe pleadings under circumstances
when a public officer dies, resigns, is removed horn office, or his term of office expires. See
generally, Abell v. Hunter, 211 A. D. 467,470 (2d Dep't 1924), aff'd, 240 N. Y. 702 (1925); see also
Douglas v. NYC Trans. Auth, 91 A.D.2d 1057, 1058 (2d Dep't 1983) (CPLR 3025(b) permits
amendment of the title or caption of the lawsuit to "reflect [the] correct status of the parties.").
Former N Y S U T President Richard E. lannuzzi was named in the current litigation and sued in his
direct capacity as an officer. As he no longer holds this position, which is now held by Karen E.
Magee, it is proper that the Court grant plaintiffs' motion to amend the caption of the pleading and
substitute Ms. Magee for Mr. lannuzzi, in her official capacity as NYS UT' s current president.
B. Update of Data
The original complaint in this action was filed on February 20,2013. It contains a wealth of
data related to school funding and local district ability to raise revenue through taxation and the
effects of that local effort. This case is now before its fourth judge and with that passage of time,
updated data has become available. This data does not change the substance of plaintiffs' argument;
rather, it simply brings the existing data up-to-date. Thus, plaintiffs respectfully request leave to
amend the complaint to include this new data.
C. Allegations Regarding Education Law 2023-b
The Court should also grant plaintiffs' motion to allow amendment of the complaint so as to
add allegations regarding the recent passage ofthe "Tax Freeze Credit," as it pertains directly to the
tax cap. See Ch. 59, L . 2014. The tax cap was codified into Education Law 2023-a and the newly
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enacted tax freeze was codified into Education Law 2023-b. This amendment also includes the
addition of Thomas H. Mattox, Commissioner of the Department of Taxation and Finance, as the
State officer charged with disbursing tax credits under the freeze. The tax freeze directly impacts the
operation ofthe tax credit over the next two tax years in two major ways.
Any school district that "pierces" the cap and does not remain within its tax levy limit, as
defined by the tax cap law, will deprive otherwise eligible taxpayer homeowners in the district of the
ability to receive a tax rebate payment in fall of 2014 or fall of 2015. This provides a direct financial
incentive to taxpayers to vote against "piercing" the property tax cap in their 2014-15 and 2015-16
school district budgets.
Additionally, even for those dishicts that remain "freeze-compliant," meaning that they do
not "pierce" the cap, the practical effect of the tax freeze payment is to exacerbate the already glaring
inequities in wealth among the poorest and wealthiest school districts, with the lion's share ofthe
tax freeze credits going to taxpayers in the state's wealthiest school districts due to their ability to
raise greater revenues without even flirting with breaking the cap.
Amending the amended complaint to include the impact of the tax freeze credit on the
operation of the tax cap, as it applies to school districts, is relevant to the Court's consideration of
this case and would not "surprise or prejudice" the defendants in any way. See Perini Corp. v. City
of New York, 27 Misc.3d 813,819 (Sup. Ct. N. Y. County 2010). Plaintiffs' amendment is relevant
and meritorious - and has been timely made in light of recent legislation. See, e.g., Matter ofGarzilli
v. Mills, 250 A.d.2d 131 (3d Dep't 1998) (parties were permitted to submit "supplemental briefs"
for the court's consideration of recent amendment to the Education Law, after the teacher's appeal
had been fully argued). The tax freeze law was signed by the Governor on March 31, 2014 and it
directly impacts the operation of the tax cap over the next two years and, in fact, further incentivizes
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taxpayers to vote against "piercing" the cap in their school districts.
Plaintiffs should be permitted to amend their amended complaint so as to have the Court
consider the tax freeze credit, as it directly pertains to school districts affected by the tax cap law.
Further, defendants are not prejudiced by any of plaintiffs' proposed amendments.
CONCL USI ON
For the reasons set forth above, plaintiffs should be permitted to amend their amended
complaint so as to, among other things, have the Court consider the tax freeze credit, as it directly
pertains to school districts affected by the tax cap legislation.
Dated: June 3, 2014
Latham, New York
Respectfully submitted,
WC H A R D E. C A S A G R A N D E , ESQ.
Attorney for Plaintiffs
Office & P.O. Address
800 Troy-Schenectady Road
Latham, N. Y. 12110-2455
Tel. No. (518)213-6000
114369
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