A recent case from the Appellate Division, Second Department, addresses one of our favorite topics, standing. It is a cautionary tale about how not to establish standing.
Tilcon New York, Inc. v Town of New Windsor involved a hybrid proceeding in which the plaintiff/petitioner asserted nine separate causes of action. The appellate court determined that plaintiff/petitioner lacked standing on each of the causes of action, resulting in the dismissal of the petition/complaint.
The case stems from a 2013 lease between Jointa Lime Company (Jointa) and the Town of New Windsor (Town) for Town-owned property. The lease expired in April 2016. Prior to the lease expiring, Jointa requested that it become a month-to-month tenant and the Town agreed, with the proviso that the Town could terminate the tenancy on 30-days’ notice. Jointa remained in possession after April 2016 and the Town continued to accept the monthly rent payments.
In May 2016, Tilcon New York, Inc. (Tilcon) commenced the hybrid proceeding. Tilcon is a business competitor of Jointa. Tilcon claimed that the month-to-month holdover tenancy violated Town Law §§ 29(11) and 64(2), General Municipal Law (GML) §§ 51 and 103 and the State Environmental Quality Review Act (SEQRA).
On appeal, the Appellate Division determined that Tilcon lacked standing on all of its asserted claims. First, the appellate court explained that standing requirements “are not mere pleading requirements but rather an indispensable part of the plaintiff’s case” and that “each element must be supported in the same way as any other matter on which the plaintiff bears the burden.” The appellate court further noted that in order to sustain a challenge to a governmental action, a plaintiff/petitioner must show “it will suffer direct harm, injury that is in some way different from that of the public at large,” and that the alleged in-fact injury “falls within the zone of interests, or concerns, sought to be promoted or protected by the statutory provisions under which the agency has acted.” The appellate court also noted that “a private citizen who does not show any special rights or interests in the matter in controversy, other than those common to all taxpayers and citizens, has no standing to sue” even if the “issue may be one of vital public concern.”
With these principles in mind, the appellate court then turned to the myriad of causes of action asserted by Tilcon against the Town.
Tilcon claimed that the Town violated Town Law §§ 29(11) and 64(2) by failing to comply with statutory requirements applicable to leasing. The appellate court found that Tilcon “failed to describe any injury to itself, either actual or potential, that has resulted from these alleged violations, much less an injury different from the general injury to the public at large that results from the Town’s alleged violation of the procedural requirements for leasing real property.” The court further noted that Tilcon, at best, may have suffered increased business competition, which the court found was insufficient to support standing.
The appellate court next dealt with the claims asserted against the Town Zoning Board of Appeals (ZBA). The appellate court noted that Tilcon was not a party to those proceedings and the decision was not adverse to Tilcon. As a result, the court found that Tilcon lacked standing for the claim asserted against the ZBA because “Tilcon failed to demonstrate it suffered an injury-in-fact distinct from the public at large.”
The appellate court next turned it focus to the claims made under SEQRA. It noted that “a generalized interest in the environment” was insufficient to establish standing under SEQRA. Similarly, the court found that Tilcon only alleged economic injury, and did not allege any environmental injury that was different from the public at large. As a result, Tilcon lacked standing to assert claims under SEQRA.
The appellate court also rejected Tilcon’s GML § 51 challenge. Tilcon was found not to have standing under that section, which “authorizes taxpayer suits to prevent waste, collusion, fraud, or other illegal acts” because Tilcon failed to include any such allegations. Rather, at most, the court noted that Tilcon may have alleged a failure to follow statutory procedure, which “does not constitute the fraud or illegality necessary to support a taxpayer action pursuant to section 51.”
Finally, the appellate court rejected Tilcon’s claims for common-law taxpayer standing. That type of claim is reserved for challenges to “important governmental actions” where “the failure to accord such standing would be in effect…an impenetrable barrier to any judicial scrutiny of legislative action.” Here, the month-to-month holdover lease was found not to be of “appreciable public significance beyond the immediately affected parties.”
This case makes it abundantly clear that standing is an essential element of challenges to municipal determinations. A petitioners needs to show more than dissatisfaction with the municipal decision. It has to explain in detail how it is injured, how its injury is different from the public at large and how it falls within the zone of interests sought to be protected by the statute under which the municipality acted. Failure to make this factual showing will doom a challenge on standing grounds.