129 Misc 2d 1068
In the Matter of Lenz & Riecker,
Inc., Petitioner, v. John T. Fitzpatrick, as State Reporter of the State of New
York, et al., Respondents.
Supreme Court of New York, Special Term, Albany County
February 18, 1986
HEADNOTES
Public Officers—Contract for Publication of Official
Reports—Powers of State Reporter in Bidding and Contracting Process
The State
Reporter acted properly in
accepting the
bid of respondent Lawyers Co-operative Publishing Company (LCP) for the
five-year contract for the publication and
printing of the official court reports with two points of
"clarification/exception" purporting to grant the
contractor a license to use
copyrighted material in its other publications since the State
Reporter has no power to confer such a benefit by contract or otherwise
(see,
Judiciary Law
§ 438) and it is thus reasonable to conclude that the State
Reporter reasonably viewed the
inclusion of such a
"clarification/exception" as a minor
variation from the terms of the
bid that did not
impair the interests of all other proposed
bidders and the State
Reporter had the right to conclude that all other
bidders, with knowledge of the law, particularly in their very
specialized field, would recognize the
futility of such
inclusion. The determination and actions of the State
Reporter in
accepting the LCP
bid following removal of the objectionable matter cannot be said to be arbitrary,
capricious or in excess of his authority in view of the broad powers delegated to the
State
Reporter by statute to make every imaginable decision in the
bidding and
contracting process for publication of the State's official court reports (subject only to
the approval of the Chief Judge of the
Court of Appeals) including the right
"to reject any and every proposal if deemed
unfavorable or
disadvantageous" (Judiciary Law
§ 434 [11]) and such decision is not subject to further
judicial review.
COUNSEL
Herzog, Nichols, Engstrom
& Koplovitz, P. C., for petitioner.
Michael Colodner for John T. Fitzpatrick and another, respondents.
Nixon, Hargrave, Devans
& Doyle for Lawyers Co-operative Publishing Company, respondent.
OPINION
AARON E. KLEIN, J.
In this CPLR
article 78 proceeding, petitioner seeks to challenge the determination of respondent,
John T. Fitzpatrick, as State
Reporter of the State of New York (hereinafter Fitzpatrick) in having permitted the
respondent, Lawyers Co-operative Publishing Company (hereinafter LCP) to
conform its
bid to the specifications for the
subject contract, to wit: a contract
for the publication and
printing of all official reports of the courts of the State of New York for the
five-year period commencing January 1, 1986; and upon such challenge, annulling
the award of said contract to LCP, and further directing respondent
Fitzpatrick to take such other and further proceedings with respect to the said
contract as justice should dictate. A respondent in these proceedings,
apparently by virtue of his statutory involvement in this
contracting, is Sol Wachtler, in his capacity as Chief Judge of the
Court of Appeals of the State of New York (hereinafter Chief
Judge).
At the outset, it must be noted that the application in petitioner's order to
show cause for a preliminary injunction pending the hearing and final
determination of these proceedings was withdrawn by counsel for petitioner in
open court at oral argument on these proceedings on December 20, 1985.
The remaining subject matter concerns the apparatus by which
contracting is legislatively mandated to be had for the publication and
printing of all official New York State court reports for the aforementioned
five-year period commencing January 1, 1986.
Judiciary Law
§ 434 provides the step-by-step procedure to be followed in public
contracting for the
printing and publication of official series court reports. The statute states as
follows:
"§ 434. Contracts for publication of reports
"1. The
printing and publication of the
court of appeals reports, the appellate division reports, the miscellaneous reports and the
combined official series shall be done under contract as hereinafter provided.
"2. Said contract shall be let and said publication shall be made by and under
the direction of the state
reporter.
"3. [As to effective date, see note below] [*]
In each year immediately preceding the expiration of the contract to be let as
hereinafter provided, the state
reporter shall give
notice that a contract will be let for said
printing and publication, together with a reference to this section, and that on or
before the
first day of
September in such year, he will receive sealed proposals for such contract. Such
notice shall be given by publication thereof once in each of the first weeks of
June, July and August, respectively, in a newspaper to be
designated by the state
reporter, published in each of the following cities, namely; New York, Albany, Rochester and Buffalo; such newspapers to be so
designated as shall be
most likely to give
notice to the public of such letting; the expense of such
publication to be paid by the state treasurer from the general funds of the
state, after the same shall have been approved in writing by the state
reporter and audited according to law.
"4. Said contract shall be let to the person who will
publish and sell said reports and said combined official series, together with the
weekly advance sheets thereof, and furnish the required copies to the various
state and county officials, on terms deemed by said state
reporter most
advantageous to the public and the state, regard being had to the proper execution of the
work. Said contract shall be let not earlier than the
sixteenth of
October, nor later than the first of
November, in such years.
"5. Said contract shall require the
contractor to continue to
publish such
reports
and the combined official series thereof (with weekly advance sheets thereof
to be published as early as practicable after the decisions of said courts
shall be handed down), and shall fix the prices at which said publications and
each of them, in the various styles of binding and weights and quality of
paper, and the sizes and the number of pages of each, shall be delivered within
the state of New York.
"6. Said contract shall require the
contractor to furnish the state library with fifty-eight copies of the
court of appeals and appellate division reports and three copies of the miscellaneous reports,
and also to furnish copies of each of said publications as follows: One of each
to the clerk of each county, for the use of the county; one of each to the
attorney general, for the use of his office; one of each to the state
comptroller, for the use of his office; one of each to the clerk of the
court of appeals, for the use of that court, and one of each to each judge or justice of a
court of
record,
for the use of his office; and one of each to the various public law libraries in the state, and the
expense of delivery thereof shall be borne by the state.
"7. Publication
under said contract shall commence on the first day of January, nineteen
hundred and forty-one, and shall continue until December thirty-first, nineteen
hundred and forty-five (unless said contract is previously annulled by the
state
reporter); thereafter said contracts shall be made for the period of five years each.
"8. Said
contractor shall agree that he will promptly after the publication of each volume of said
reports, and constantly thereafter, keep the same on hand for open and public
sale, and will deliver the same, complete, bound and lettered, to
any and to all persons desiring to purchase, at a price for each which shall
be fixed by said contract.
"9. Said contract shall contain such other provisions as
in the judgment of the state
reporter may be necessary to safeguard the interests of the state and of the public,
and shall be subject to the approval of the chief judge of the
court of appeals. The form of the proposed contract complete as to all its terms, except the
prices to be paid the
contractor, shall be prepared by the state
reporter and be placed on file in the office of the law
reporting
bureau on or before the day of the first publication of
notice
under subdivision three of this section.
"10. To every proposal there shall be annexed a bond executed by the proposed
contractor, with sureties conditioned for the faithful performance of said contract,
which bond shall be approved as to form, manner of execution, amount and
sufficiency of sureties, by the chief judge of the
court of appeals.
"11. The right to reject any and every proposal if deemed
unfavorable or
disadvantageous is reserved to the state
reporter, and the state
reporter may
readvertise until
bids
advantageous to the state and to the public have been secured.
"12. If the
state
reporter determines that a contract has not been faithfully kept and performed by the
contractor, or whenever in the judgment of the state
reporter the public interest may so require, of which the state
reporter shall be exclusive judge and his decision shall be final, the state
reporter may, by an instrument in writing signed by him and approved by the chief judge
of the
court of appeals and filed in the office of the
secretary of state, modify said contract in the interest of justice, or annul said contract from
a time specified in said instrument and thereupon immediately enter into a new
contract likewise to be approved by the chief judge of the
court of appeals.
"13. Neither the state
reporter nor any of his deputies nor any of the employees of the law
reporting
bureau shall have any pecuniary interest in said reports or said contracts.
"14. Nothing provided in this article shall affect the obligation of any
contracts for the
printing and publication of the
aforementioned reports, or any of them, in force on July first, nineteen
hundred thirty-eight; but the state
reporter shall succeed to all the powers, rights and interests with respect to said
contracts, possessed by the previous official
reporters or board of
reporters by whom said contracts were let."
It is noted that subdivision (2) (quoted above) provides that the
"contract shall be let
and said publication shall be made by and under the direction of the state
reporter", and that subdivision (4) provides
"[said] contract shall be let to the person who will
publish and sell said reports * * * on terms deemed by said state
reporter most
advantageous to the public and the state, regard being had to the proper execution of the
work." Also subdivision (9) provides that
"[said] contract
shall contain such other provisions as in the judgment of the state
reporter may be necessary to safeguard the interests of the state and of the public,
and shall be subject to the approval of the chief judge of the
court of appeals", and subdivision (11) provides that
"[the]
right to reject any and every proposal if deemed
unfavorable or
disadvantageous is reserved to the state
reporter, and the state
reporter may
readvertise until
bids
advantageous to the state and to the public have been secured."
It is
Judiciary Law
§ 434 (12), however, which grants to the State
Reporter broad and unusual power. Such section (as quoted above at length) clearly
establishes the absolute discretion of the State
Reporter (subject only to the approval of the Chief Judge of the
Court of Appeals) to make every imaginable decision in the
bidding and
contracting process for publication of this State's official court reports.
In 1884 in the case of
People v Carr (5 Silvernail 302,
23 NYS 112 [Sup Ct, Gen Term, 3d Dept, Jan. 1884]) review was sought of the action by the
Secretary of State, the Comptroller and the State
Reporter in making (as a board empowered to contract for same)
a contract for
the publication of reports of the
Court of Appeals. At that time provision for such publication was contained in Code of Civil
Procedure
§ 211, and the court posed the question as to whether, in letting the contract,
the
contracting board had acted lawfully. The court answered its question in the affirmative
as follows:
"There
is nothing in Code, section 211, requiring the contract to be made with the
lowest bidder or to any particular bidder. The action of the defendants was not
limited or restrained after the bids were before them. They are required to
'advertise for, receive and consider proposals for the publication of the
reports.' This the defendants certify was done. They were then required to make
a contract, 'on terms the most advantageous to the public, regard being had to
the proper execution of the work,' etc. This the defendants by their return
certify they have done. The return is conclusive. People ex rel. Sims v. Board of Fire Commissioners, 73 N. Y. 437.
"A
discretionary power was given by statute to the defendants. It has been
exercised by them in making this contract. What is the evidence that such
discretion has been abused or that
their action was illegal? Who can review such proceedings, and how can they
be reviewed? If by this court, then its three justices are called upon to
substitute their judgment and their discretion in place of those
designated by law. The return of the defendants is a complete justification upon its
face of the making of the contract in question and must be taken as true.
"* * * The contract to be made was for the public benefit. The defendants in
their discretion could embrace other conditions than those named in the law, if
in their opinion they conduced to the public benefit, and hence they could by
notice indicate that such requirements would be made.
Little v. Banks, 85 N. Y. 258." (5 Silvernail, at pp 303-304,
23 NYS, at pp 113-114.)
In the much more recent case of
Matter of Lawyers Co-op. Pub. Co. v Flavin (69 Misc 2d 493,
affd
39 AD2d 616,
lv denied
30 NY2d 488) the issue presented was whether the annulment of a similar contract, entered
into between the respondent State
Reporter Flavin and the petitioner publisher, with the written approval of then Chief
Judge of the
Court of Appeals, Honorable Stanley H. Fuld, was proper. The allegation in such case
was that the publication contract executed
November 27, 1970 between the then State
Reporter and Lawyers Co-operative Publishing Company had been entered into in violation
(in certain respects) of
Judiciary Law
§ 434. Thus, the last previous publisher of the official reports, Williams Press,
Inc., withheld on that basis, subscriber lists and certain bound volumes and
other material in type from the petitioner, Lawyers Co-operative, and commenced
a
CPLR article 78 proceeding against the State
Reporter and Lawyers Co-operative. Under such circumstances, the then State
Reporter determined, with the concurrence of the Chief Judge of the
Court of Appeals, that time was of the essence and
" 'in the interest of the continuous, timely and accurate publication of the
Official State Reports, the said agreement between respondent Flavin and
petitioner should be annulled and that there should be a prompt determination
of the disputed rights and obligations and of all litigation and then a
rebidding of the contract for the publication of the Official State Reports on indisputable terms' "
(Matter of Lawyers Co-op. Pub. Co. v Flavin, supra, p 496). This determination
was made the subject of the challenge by Williams Press in such case, it being
claimed that such determination was arbitrary,
capricious and an abuse of discretion.
In
Matter of Lawyers Co-op. Pub. Co. v Flavin (supra)
the court, at Special Term, raised the question as to whether the determination
made by the State
Reporter was subject to
judicial review. Of direct relevancy to such
inquiry was
Judiciary Law § 434 (12) which that court held, while acknowledging that the statute did not so
state in so many words, barred
judicial review. Nonetheless, the court perceived such legislative intent as being implicit
in the words of the statute, and the court added the following observation (at
p 497):
"Furthermore, a form of review is built into the subdivision by the requirement
that the decision of the State
Reporter be approved by the State's highest judicial officer."
This court also finds implicit in the general language of
Judiciary Law
§ 434, when read as a whole, and particularly in subdivision (11) thereof, the
legislative intent to repose, subject only to the approval of the Chief Judge,
final authority on such matter in the State
Reporter. (§ 434 [11] is quoted at length above.)
In the instant case, the precise objection raised by the petitioner is that the
successful
bidder, respondent,
LCP, enclosed with its
bid a letter dated August 29, 1985 in which it stated that:
"In connection with said
bid, LCP also submits two points of
clarification, and exception from the
bid contract." The points of
clarification/exception are then stated to be as follows:
"1. On page 15, at the end of Section 7, we have added the following sentence:
'The
Contractor is hereby granted a nonexclusive license to use such
copyrighted material in other publications of the
Contractor, and to distribute such material in electronic form.'
"2. On page 19, Section 12, line 2 after the word 'sell' we added 'copyrighted material published by the State and contained in', and at line 7 we added
'without a license from the state'."
These items, it is contended by petitioner, made the
bid of LCP unresponsive to the contract and, therefore, void. Petitioner further
alleges that in the making of such changes, LCP thereby
"appropriated for its own use valuable
copyrighted material specifically precluded in the original contract from becoming the
property of the
contractor."
Petitioner, therefore, maintains that the
inclusion of such
clarifications/exceptions in the LCP
bid worked a
disadvantage to other
bidders, and that acceptance of the LCP
bid was an abuse of the powers delegated to the State
Reporter under
Judiciary Law
§ 434.
While it is true that the addition of terms and conditions to a
bid which have the effect of substantially altering the same may be viewed as
conferring an advantage to the
bidder making such alteration, the
question presented here is whether the
inclusion of the privilege of copyright by LCP was such a substantial variance.
Judiciary Law
§ 438 provides as follows:
"§ 438. Copyright of notes prepared by law
reporting
bureau
"The copyright of the statement of facts, of the head notes and of all other
notes or references prepared by the law
reporting
bureau must be taken by and shall be vested in the
secretary of state
for the benefit of the people of the state. The
secretary of state is authorized by a writing filed in his office to grant to any person, firm or
corporation, under such terms and conditions as he and the chief judge of the
state of New York may determine to be for the best interests of the state,
the right to
publish the above mentioned
copyrighted matter."
Precisely stated, the question is whether the purported
inclusion in LCP's
bid submitted solely to the State
Reporter, pursuant to his
contracting powers under
Judiciary Law
§ 434, subject thereafter only to approval by the Chief Judge, can be viewed as such
a substantial or material alteration in the
bidding process as to
disadvantage the other
bidders when the matter so sought to be added is totally outside the power of the
State
Reporter to award.
Matter of C. K. Rehner, Inc. v City of New York (106 AD2d 268) the court stated (at pp
269-270):
"It is a matter for the agency to determine whether the variance between the
bid and specification is material or substantial in pursuance of the underlying
purpose and policy to treat all
bidders alike so as to avoid the possibility of fraud, corruption or favoritism. In a
proceeding to review any such determination, the judicial function is limited
to whether the administrative action may be supported on any rational basis.
It is beyond the scope of
judicial review to consider the facts
de novo nor may the court substitute its judgment for that of the agency
(Matter of Kayfield Constr. Corp. v Morris, 15 AD2d 373, 378)."
Matter of Cataract Disposal v Town Bd. (53 NY2d 266) the court stated (at p 272):
"A minor
variation from the terms of an advertisement for
bids should be considered material only when it would
impair the interests of the
contracting public authority or place some of the
bidders at a competitive
disadvantage
(Le Cesse Bros. Contr. v Town Bd. of Williamson, 62 AD2d 28, affd
46 NY2d 960)."
The attempted addition to the contract made by LCP in its
bid was, so far as the State
Reporter was concerned, an exercise in
futility. The State
Reporter had no power to confer such a benefit by contract or otherwise. Therefore, it
is reasonable to conclude that the State
Reporter reasonably viewed the
inclusion of such a
"clarification/exception" as a minor
variation that did not
impair the interests of all other proposed
bidders. The State
Reporter had the right to conclude that all other
bidders, with knowledge of the law, particularly in their very specialized field,
would recognize the
futility of such
inclusion.
Superimposed upon the foregoing, one must consider the broad delegation of
powers given to the
State
Reporter under the statute, and specifically his right
"to reject any and every proposal if deemed
unfavorable or
disadvantageous" (Judiciary Law
§ 434 [11]). He also had the absolute
power to reject all
bids, and
readvertise until finally satisfied that the State and public would be best served by the
final contractual product. With all of this in view, it cannot be said that
the determination and actions of the State
Reporter in
accepting the LCP
bid following removal of the objectionable matter was arbitrary,
capricious or in excess of his authority. Accordingly, such decision is not subject to
further
judicial review,
and the petition herein shall be dismissed.
Attorney for respondents, John T. Fitzpatrick and Chief
Judge Sol Wachtler, shall submit a judgment in accordance herewith.
FOOTNOTES
Footnote 1:Subdivision (3) as amended by L 1985, ch 218,
§ 1, eff June 18, 1985.