FILED: NEW YORK COUNTY CLERK 11/21/2013

NYSCEF DOC. NO. 3

INDEX NO. 160880/2013 RECEIVED NYSCEF: 11/21/2013

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK IN THE MATTER OF SUBPOENA ISSUED BY COMMISSION TO INVESTIGATE PUBLIC CORRUPTION TO HARRIS BEACH PLLC Index No.: __________ I.A.S. PART: JUSTICE

HARRIS BEACH PLLC’S MEMORANDUM OF LAW IN SUPPORT OF PETITION TO QUASH NON-JUDICIAL SUBPOENA AND FOR A PROTECTIVE ORDER

HARRIS BEACH PLLC 99 Garnsey Road Pittsford, New York 14534 Telephone: (585) 419-8800 Fax: (585) 419-8811

TABLE OF CONTENTS Page

TABLE OF AUTHORITIES ......................................................................................................... iii PRELIMINARY STATEMENT .....................................................................................................1 STATEMENT OF FACTS ..............................................................................................................2 A. B. The Governor’s Proposed Public Corruption Reform Legislation ..........................2 The Governor Forms the Commission to Investigate Public Corruption ................................................................................................................3 The Commission Issues Subpoenas to Legislators’ Outside Employers ................................................................................................................5

C.

ARGUMENT...................................................................................................................................8 I. THE SUBPOENA SHOULD BE QUASHED BECAUSE IT EXCEEDS THE COMMISSION’S STATUTORY AUTHORITY UNDER NEW YORK EXECUTIVE LAW............................................................8 A. The Subpoena Constitutes an Unconstitutional Intrusion Into the Affairs of the Legislature by the Executive Branch and Exceeds the Jurisdiction Afforded to the Executive Branch by the Moreland Act........................................................................8 i. Governor Cuomo’s Grant of Authority to the Commission to Investigate The Legislature Exceeds the Governor’s Jurisdiction Under the Moreland Act......................8 The Executive Order Impermissibly Relies on Executive Law Section 63(8) As Authority to Pursue Indirectly, Through the Attorney General, What the Governor is Forbidden From Pursuing Directly Under the Moreland Act ..................................................10 The Subpoena Pursues Indirectly, Through Harris Beach, What the Commission is Forbidden from Pursuing Directly, From Senator Nozzolio....................................13

ii.

iii.

B.

The Subpoena was Improperly Issued to Implement Governor Cuomo’s Coercive Strategy To Effect Legislative Reform .......................................................................................................13

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C.

The Subpoena was Improperly Issued Prior to the Commission’s Promulgation of Rules and Procedure ...............................15

II.

THE SUBPOENA SHOULD BE QUASHED BECAUSE IT IS NOTHING MORE THAN AN IMPERMISSIBLE FISHING EXPEDITION........................................................................................................16 A. The Commission Has No Factual Predicate to Support the Subpoena....................................................................................................16 The Admission That the Subpoena is Part of a Criminal Investigation Subjects the Subpoena to a Heightened Evidentiary Threshold That the Commission Cannot Satisfy....................18 The Information Demanded of Harris Beach Is Too FarReaching and Bears Little to No Relevance to the Commission’s Purported Purpose..............................................................19

B.

C.

III.

THE SUBPOENA MUST BE QUASHED BECAUSE IT NOT ONLY DEMANDS PRIVILEGED AND CONFIDENTIAL MATERIAL, BUT IT IS OVERLY BROAD, VAGUE, UNDULY BURDENSOME AND OPPRESSIVE..................................................................22 A. The Subpoena Demands Disclosure of Confidential, Privileged and Proprietary Information .....................................................23 The Subpoena is Overbroad, Vague and Unduly Burdensome .................25 The Subpoena Is Oppressive......................................................................29

B. C.

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TABLE OF AUTHORITIES Page Cases 2961 Realty Corp. v. Temp. Comm'n of Investigation of State of N.Y., 115 Misc. 2d 768 (Sup. Ct. N.Y. County 1982)........................................................................ 20 Brodsky v. N.Y. Yankees, 26 Misc. 3d 874 (Sup. Ct. Albany County 2009)................................................................ 17, 26 Cunningham & Kaming, P.C. v. Nadjari, 53 A.D.2d 520 (1st Dep’t 1976).......................................................................................... 24, 25 DiBella v. Hopkins, 403 F.3d 102 (2d Cir. 2005) ......................................................................... 24 Fahy v. Comm'n to Investigate Allegations of Police Corruption & City’s Anticorruption Procedures, 65 Misc. 2d 781 (Sup. Ct. N.Y. County 1971), aff'd, 36 A.D.2d 802 (1st Dep’t 1971) ...................................... 27 Finger Lakes Racing Assn. v. New York State Racing & Wagering Bd., 45 N.Y.2d 471 (1978) ................................................................................................................. 9 Future Tech. Assocs. v. Special Comm’r of Investigation for N.Y.C. Sch. Dist., 115054/2010, 2011 N.Y. Misc. LEXIS 1352 (Sup. Ct. N.Y. County March 17, 2011) ................................................................................... 17 Harlem Teams for Self-Help, Inc. v. Dep’t of Investigation of City of N.Y., 122 Misc. 2d 1066 (Sup. Ct. N.Y. County 1984)................................................................ 16, 19 Horn Constr. Co. v. Fraiman, 34 A.D.2d 131 (1st Dep’t 1970), aff'd, 29 N.Y.2d 559 (1971) ................................................. 21 In re Diamond Asphalt Corp. v. Sander, 92 N.Y.2d 244 (1998) ............................................ 11, 13 In re New York State Superfund Coalition v. New York State Dept. Of Envtl. Conservation, 75 N.Y.2d 88 (1989) ..................................... 9 In re of Attorney Gen. of State of N.Y., 269 A.D.2d 1 (1st Dep’t 2000) ........................... 11, 13, 20 Lerner v. Lerner, 90 A.D.2d 452 (1st Dep’t 1982)................................................................. 22, 25 Mahoney v. Staffa, 184 A.D.2d 886 (3d Dep’t 1992) ................................................................... 25

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Myerson v. Lentini Bros. Moving & Storage Co., 33 N.Y.2d 250 (1973) ........................................................................................................ passim N.Y. Shredding Corp. v. NYC Dep’t of Investigation, 184 Misc. 2d 174 (Sup. Ct. N.Y. County 2000)........................................................................ 16 N.Y.C. Dep't of Investigation v. Passannante, 148 A.D.2d 101 (1st Dep’t 1989)........................................................................................ 18, 21 Naples v. Whelan, 100 A.D.2d 743 (4th Dep’t 1984), aff'd, 63 N.Y.2d 891 (1984) ................................................................................................ 17, 20 Nat’l Freelancers, Inc. v. State Tax Comm’n, Dep’t of Taxation & Fin., 126 A.D.2d 218 (3d Dep’t 1987) ................................................................................................ 1 New York Statewide Coalition of Hispanic Chambers of Commerce v. New York City Dept. of Health and Mental Hygiene, 110 A.D.3d 1 (1st Dep’t 2013).................................................................................................. 15 Nicholson v. State Comm'n on Judicial Conduct, 67 A.D.2d 649 (1st Dep’t 1979).......................................................................................... 16, 18 Nicholson v. State Comm'n on Judicial Conduct, 68 A.D.2d 851 (1st Dep’t 1979)................................................................................................ 16 Pavillion Agency, Inc. v. Spitzer, 9 Misc. 3d 626 (Sup Ct. New York County 2005).............................................................. 23, 24 People ex rel. Spitzer v. Grasso, 42 A.D.3d 126 (1st Dep’t 2007)........................................ passim Raynor v. Landmark Chrysler, 18 N.Y.3d 48 (2011) ................................................................... 10 Reuters Ltd. v. Dow Jones Telerate, Inc., 231 A.D.2d 337 (1st Dep’t 1997)........................................................................................ 23, 29 Straus v. Ambinder, 61 A.D.3d 672 (2d Dep’t 2009) ................................................................... 25 Suffolk County Builders Assn. v. County of Suffolk, 46 N.Y.2d 613 (1979) ................................................................................................................. 8 Temp. State Comm'n on Living Costs & Econ. v. Bergman, 80 Misc. 2d 448 (Sup. Ct. N.Y. County 1975).................................................................... 12, 19 Tierney v. Cohen, 268 N.Y. 464 (1935)........................................................................................ 11

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Tze Chun Liao v. New York State Banking Dept., 74 N.Y.2d 505 (1989) ............................................................................................................... 12 White Bay Enters. v. Newsday, Inc., 288 A.D.2d 211 (2d Dep’t 2001) .............................................................................................. 25 Wise v. Consolidated Energy Co. of N.Y., 282 A.D.2d 335 (1st Dep’t 2001).............................................................................................. 23 Statutes N.Y. Exec. Law § 6......................................................................................................... 1, 3, 10, 11 N.Y. Exec. Law § 63(8) ......................................................................................................... passim N.Y. Exec. Law § 63(12) ................................................................................................................ 1 N.Y. Exec. Order No. 106, § I ........................................................................................................ 4 N.Y. Exec. Order No. 106, § II(a)-(c)............................................................................................. 4 N.Y. Exec. Order No. 106, § IV ..................................................................................................... 4 N.Y. Pub. Off. Law § 73-a............................................................................................................ 28 N.Y. Pub. Off. Law § 73-a(3) ....................................................................................................... 28 N.Y. Pub. Off. Law § 73-a(8)(b)(v).............................................................................................. 24 N.Y. State Finance Law § 187 ........................................................................................................ 1 Other Authorities E. Breuer, Moreland Act Investigations in New York: 1907-65 (1965) at pp. 29......................... 10 Glenn Bain and Kenneth Lovett, Cuomo Believes Anti-Corruption Commission Can Force Politicians to Give Details on Outside Incomes, New York Daily News (Sept. 24, 2013) ............................................................................................................... 18 Governor’s Press Office, Governor Cuomo Appoints Moreland “Commission to Investigate Public Corruption,” with Attorney General Schneiderman Designating Commission Members as Deputy Attorneys General (July 2, 2013)...................... 3 Governor’s Press Office, Governor Cuomo Details Comprehensive Reforms to Prevent Public Corruption, Modernize New York’s Voting Laws, and Reduce the Influence of Money in Politics (June 11, 2013)..................................................................... 2

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Governor’s Press Office, Governor Cuomo Proposes New Class of Public Corruption Crimes (April 9, 2013) ............................................................................................. 2 Governor’s Press Office, Governor Cuomo Signs Ethics Reform Legislation (Aug. 15, 2011),. ....................................................................................................................... 28 Interview with Attorney General Schneiderman, Capital Pressroom with Susan Arbetter (Nov. 12, 2013) ..................................................................................................... 12, 14 Kenneth Lovett & Glenn Bain, Cuomo Believes Anti-corruption Commission Can Force Politicians to Give Details on Outside Income, New York Daily News (Sept. 24, 2013) ........................................................................................................................... 5 Kenneth Lovett & Glenn Bain, Senate and Assembly Leaders Refuse to Disclose Details About Outside Jobs to Gov. Cuomo’s Anti-corruption Commission, New York Daily News (Sept. 20, 2013) ..................................................................................... 4 Kenneth Lovett, Gov. Cuomo Expects Challenges To Anti-Corruption Commission Subpoenas, New York Daily News (Oct. 21, 2013)............................................. 14 N.Y. Eth. Op. 645, 1993 WL 560284 (May 3, 1993) ................................................................... 24 N.Y. Exec. Order (Cuomo) 106 ............................................................................................. passim N.Y. Exec. Order (Cuomo) 106, § I.............................................................................................. 11 N.Y. Exec. Order (Cuomo) 106, § V ............................................................................................ 15 Press Release from The Moreland Commission to Investigate Public Corruption, Statement From Moreland Commission Co-Chairs (Oct. 15, 2013) .......................................... 5 Thomas Kaplan, Cuomo Creates Special Commission to Investigate Corrupt Elected Officials, New York Times (July 2, 2013) ................................................................... 25 Thomas Kaplan, Cuomo Says Abortion and Anticorruption Bills Aren’t Likely to Pass Legislature, New York Times (June 17, 2013) .................................................................. 3 Thomas Kaplan, Panel to Investigate State Democratic Party, New York Times (Oct. 15, 2013) ............................................................................................................................ 5 Yancey Roy, Skelos: No ‘witch hunt’, Newsday (July 2, 2013), at A34 ..................................... 18 Rules N.Y. C.P.L.R. Article 23................................................................................................................. 1

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N.Y. C.P.L.R. § 2304...................................................................................................................... 1 N.Y. C.P.L.R. § 3103...................................................................................................................... 2 N.Y.C.R.R. tit. 13 § 400.2 .............................................................................................................. 1 N.Y. Rules of Professional Conduct, Rule 1.6 ....................................................................... 23, 24 N.Y. Rules of Professional Conduct, Rule 1.6, Comment 2......................................................... 29

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PRELIMINARY STATEMENT On October 15, 2013, Harris Beach PLLC (“Harris Beach”) received a non-judicial subpoena duces tecum (“Subpoena”) issued by Danya Perry, Deputy Attorney General and Chief of Investigations, on behalf of the Moreland Commission to Investigate Public Corruption (the “Commission”). Affidavit of Karl J. Sleight, dated November 21, 2013 at ¶ 11, Exhibit C (herein “Sleight Aff.”). The Subpoena is purportedly authorized pursuant to New York

Executive Law Sections 6, 63(8) and 63(12), State Finance Law Section 187, N.Y.C.R.R. tit. 13 section 400.2, New York Civil Practice Law and Rules Article 23 and Executive Order 106. Harris Beach is a private limited liability company that has been providing legal services in New York for over 150 years. Among Harris Beach’s practicing attorneys is Michael

Nozzolio, who, separate and independent from his legal practice at Harris Beach, serves as a New York State Senator. Senator Nozzolio has practiced at Harris Beach since 1995, and since January 1, 1983 has separately served as a member of the New York State Assembly and more recently as a member of the New York State Senate. For a non-judicial subpoena to be enforceable under New York law, the issuing entity must establish: (1) its authority for both engaging in such an investigation and issuing the subpoena; (2) an authentic factual basis to warrant the particular investigation; and (3) that the evidence sought is reasonably related to the subject of inquiry. Myerson v. Lentini Bros. Moving & Storage Co., 33 N.Y.2d 250, 258 (1973); see also Nat’l Freelancers, Inc. v. State Tax Comm’n, Dep’t of Taxation & Fin., 126 A.D.2d 218, 220 (3d Dep’t 1987). The Commission has not and cannot establish any of the three prerequisites—failure to do so as to any one of which is fatal—to support enforcement of the Subpoena. Accordingly, pursuant to N.Y. C.P.L.R. § 2304, Harris Beach moves to quash the Subpoena on the grounds that: (1) it exceeds the Commission’s statutory authority and violates New York’s separation of powers doctrine, as is more fully set -1-

forth in the memorandum of law filed by the New York State Senate in connection with its own challenge to the Subpoena, which Harris Beach hereby incorporates in its entirety; (2) because there is no factual predicate of public corruption or wrongdoing by Harris Beach or Senator Nozzolio, the Subpoena is nothing more than an unfounded and highly intrusive fishing expedition; (3) it is substantively improper because it (a) seeks confidential and privileged information, (b) is overbroad, vague and unduly burdensome, and (c) is oppressive. Sleight Aff., ¶ 16, Exhibit D. For these reasons, Harris Beach requests that this Court (1) quash the Subpoena, or, in the alternative, (2) issue a protective order pursuant to N.Y. C.P.L.R. § 3103 directing that Harris Beach need not respond to the Subpoena. STATEMENT OF FACTS A. The Governor’s Proposed Public Corruption Reform Legislation.

On April 9, 2013, Governor Cuomo proposed the Public Trust Act, the first piece of a three-part legislative package purportedly aimed at curbing public corruption by implementing: (1) tougher punishments for public corruption crimes; (2) voting reforms; and (3) campaign finance reforms.1 None of the Governor’s proposed bills called for state legislators to disclose additional information beyond that which the Public Integrity Reform Act of 2011 already obligates them to disclose about their outside employment or clients. Nor would the proposed legislation have imposed any special disclosure requirements on legislators’ outside employers. Despite holding several news conferences about the proposed legislation during the spring of 2013, the Governor did not release all three proposed bills until June 11, 2013—nine
1

Governor’s Press Office, Governor Cuomo Proposes New Class of Public Corruption Crimes (April 9, 2013), https://www.governor.ny.gov/press/04092013New-Class-of-Public-Corruption-Crimes; Governor’s Press Office, Governor Cuomo Details Comprehensive Reforms to Prevent Public Corruption, Modernize New York’s Voting Laws, and Reduce the Influence of Money in Politics (June 11, 2013), http://www.governor.ny.gov/press/06-11-2013-Influence-of-Money-in-Politics.

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days before the end of the legislative session. On June 17, 2013, the Governor acknowledged in a radio interview that he did not expect the Legislature to approve his proposed public corruption laws before the session’s June 20, 2013 close.2 The Governor threatened that should the

Legislature fail to act, he would appoint a commission to investigate the role of money in the State political system.3 As the Governor predicted, the legislative session closed before the bills were brought to the Senate floor for a vote. B. The Governor Forms the Commission to Investigate Public Corruption.

Expressing his frustration with the Legislature’s failure to enact his proposed legislation,4 on July 2, 2013, pursuant to New York Executive Law Sections 6 and 63(8), the Governor issued Executive Order 106, establishing the Commission to Investigate Public Corruption. Sleight Aff., Exhibit C. According to the Executive Order, the Commission’s ostensible purposes include investigating: (1) the management and affairs of the New York State Board of Elections, including an examination of compliance with and the effectiveness of campaign finance laws; (2) weaknesses in existing laws, regulations and procedures regulating lobbying, including compliance by organizations and other persons engaged in lobbying or otherwise attempting to influence public policies or elections; and (3) weaknesses in existing laws, regulations and procedures related to addressing public corruption, conflicts of interest and ethics in State
2

3 4

See Thomas Kaplan, Cuomo Says Abortion and Anticorruption Bills Aren’t Likely to Pass Legislature, New York Times (June 17, 2013), http://www.nytimes.com/2013/06/18/nyregion/cuomo-says-abortion-andanticorruption-bills-arent-likely-to-pass-legislature.html. See id. In a July 2, 2013 press release announcing the formation of the Commission, the Governor stated: “From the beginning, I said I would not accept a watered-down approach to cleaning up Albany and that the Legislature must either pass this legislative package or I would empanel an investigative commission tasked with accomplishing these same goals to achieve reform. Since the Legislature has failed to act, today I am formally empanelling a Commission to Investigate Public Corruption . . . .” Governor’s Press Office, Governor Cuomo Appoints Moreland “Commission to Investigate Public Corruption,” with Attorney General Schneiderman Designating Commission Members as Deputy Attorneys General (July 2, 2013), http://www.governor.ny.gov/press/07022013-new-moreland-commission-named (emphasis added).

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Government.5 The Governor directed Attorney General Eric Schneiderman to inquire into these three areas and appointed twenty-five members to the Commission to assist him in the endeavor, ten of whom are sitting district attorneys.6 Pursuant to N.Y. Exec. Law § 63(8), the Governor appointed those ten attorneys as Deputy Attorneys General.7 On or about August 27, 2013, the Commission sent letters directly to state legislators whose outside income from any single non-legislative source exceeds $20,000. Senator

Nozzolio received one of those letters. The letters demand that the legislators provide certain information regarding their outside employment, including: (1) a description of the services provided through outside employment; (2) the amount of compensation received for those services, and the basis for computing that compensation; and (3) for those legislators who are attorneys, a list of clients in any civil matters or any publicly filed criminal matters in which the legislator is the attorney of record. Sleight Aff., ¶ 7, Exhibit A. On September 20, 2013, the State Assembly and Senate responded in a joint letter, declining to produce the requested material. They further stated that all legislators had already submitted annual statements of financial disclosure to the Legislative Ethics Commission as required by the Public Integrity Reform Act of 2011, which were publicly available and included some information requested by the Commission. See Sleight Aff., ¶ 9, Exhibit B. That same day, Commission spokesperson Michelle Duffy suggested that the response from the Assembly and Senate implied the legislators had something to hide: “As the old adage goes, if you’ve done nothing wrong, you have nothing to hide.”8 Moreover, she described the
5 6 7 8

Exec. Order No. 106, § II(a)-(c). Exec. Order No. 106, § I. Exec. Order No. 106, § IV. Kenneth Lovett & Glenn Bain, Senate and Assembly Leaders Refuse to Disclose Details About Outside Jobs to Gov. Cuomo’s Anti-corruption Commission, New York Daily News (Sept. 20, 2013), http://www.nydailynews.com/ news/politics/legislature-rejects-cuomo-anti-corruption-commission-requestarticle-1.1463102.

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Legislators’ position as “legally indefensible, ethically repugnant, and disrespectful to the public’s right to know,” threatening that “[t]here are a number of avenues through which the Commission can obtain the information being sought, and we will pursue them.”9 At a press event on September 23, the Governor echoed this rhetoric: prosecutors . . . . “They [the panel] are

When they say they have other avenues, it means they have other avenues

they are going to pursue.”10 On October 15, 2013, the Commission’s three co-chairs stated that the Commission would proceed to “aggressively move forward in compelling the production of information into specific matters the Commission is investigating.”11 Later that day, the Commission emphasized the broad scope of its investigation, claiming, “Today, in addition to the investigation into the Legislature, the Moreland Commission has moved to look across the board at all housekeeping accounts . . . . Everything is on the table. We are looking at everything.”12 C. The Commission Issues Subpoenas to Legislators’ Outside Employers.

Rather than issue a subpoena directly to New York legislators, however, the Commission issued subpoenas to the employers, including law firms, of those legislators with outside income over $20,000. On October 15, 2013, Harris Beach was served with the Subpoena at issue on this motion. As signaled by and consistent with the Commission’s overheated rhetoric, the Subpoena demands substantially more information than what was sought by the informal request. Whereas the August 27th letter requested a description or list of the services the legislator provides, the

9 10

11

12

Id. (emphasis added). Kenneth Lovett & Glenn Bain, Cuomo Believes Anti-corruption Commission Can Force Politicians to Give Details on Outside Income, New York Daily News (Sept. 24, 2013), http://www.nydailynews.com/news/ politics/ cuomo-commission-details-pols-incomes-article-1.1465539 (emphasis added). Press Release from The Moreland Commission to Investigate Public Corruption, Statement From Moreland Commission Co-Chairs (Oct. 15, 2013). Thomas Kaplan, Panel to Investigate State Democratic Party, New York Times (Oct. 15, 2013), http://www.nytimes.com/2013/10/16/nyregion/panel-to-investigate-state-democratic-party.html?_r=0 (emphasis added).

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Subpoena demands “any and all” Documents and Communications relating to Senator Nozzolio’s legal services, as well as Documents and Communications relating to Harris Beach and its clients. The Subpoena broadly defines “Document,” “Communication,” and “Harris Beach” as follows:  “Communication” is defined in the “broadest sense of the term,” including, among other things, “conversations, discussions and “other transmittal of information or message, whether transmitted in writing, orally, electronically or by any other means.”13 “Document” is also defined in the “broadest sense of the term” and “means each and every writing of whatever nature, whether an original, a draft, or a copy, however produced or reproduced, and each and every tangible thing from which information can be processed or transcribed.”14 The Subpoena notes specific examples of items that fall within this definition, such as plans, records, charts, graphs, diaries, analyses, instructions, voicemail, memoranda, notes, recordings (audio, visual or digital), credit card charge slips, USB flash drives, diaries, studies, calendars, photographs (positive prints and negatives), computer printouts and programs, microfilm and marginal comments appearing on any Document.15 “Harris Beach” is broadly defined to include not just the firm itself, but also its attorneys, principals, executives, representatives, agents, affiliates, present or former parents, subsidiaries, related entities, directors, officers chair, partners, supervisors, representatives, agents, contractors, or other persons acting on the firm’s behalf, its respective predecessors or successors or any of the affiliates of the foregoing.16 In addition to requesting general information about Senator Nozzolio’s legal services, compensation for the same, and a list of client names, the Subpoena seeks documents and communications pertaining to more far-reaching topics about Senator Nozzolio, Harris Beach, and the firm’s clients, including:  Documents and Communications relating to professional services provided by Senator Nozzolio;17

13 14 15 16 17

Subpoena § A(2). Id. at § A(3). Id. Id. at § A(1). Request No. 1, id. at § C(1).

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Any contract, agreement, appointment or offer letter, letterhead, business card, attorney profile, and any Document, including correspondence, describing Senator Nozzolio’s position within the firm;18 Records of Senator Nozzolio’s compensation, including in-kind benefits;19 Invoices, billable hour reports, timesheets, expense reports, reimbursement forms relating to Senator Nozzolio;20 Documents and Communications relating to the solicitation and engagement of any and all Harris Beach clients by Senator Nozzolio;21 Clients advised or represented by Senator Nozzolio, and a general description of the services provided to such clients;22 Building access records and sign-in sheets reflecting Senator Nozzolio’s access to Harris Beach’s office;23 Documents and Communications showing any relationship, business (including receipt of funding), litigation, lobbying or other contacts on Harris Beach’s own behalf with, before or against the State of New York or any of the State’s affiliated entities or bodies;24 Documents and Communications showing clients that have had any relationship, business (including receipt of funding), litigation, lobbying or other contacts with before or against the State or any of its affiliated entities or bodies;25 Documents and Communications showing any clients that have engaged Harris Beach in connection with requests for funding, lobbying activity, legislation or any other legislative or political activity;26 Documents and Communications relating to monies, benefits, or campaign contributions from Harris Beach, its members, or close relatives of its members, or any political organization or committee associated with Harris Beach to elected state officials, political candidates, political entities, campaigns, political action committees; political party organizations, or political clubs.27

     

18 19 20 21 22 23 24 25 26 27

Request No. 1(a), id. at § C(1)(a). Request No. 1(b), id. at § C(1)(b). Request No. 1(c), id. at § C(1)(c). Request No. 1(d), id. at § C(1)(d). Request No. 1(e), id. at § C(1)(e). Request No. 1(f), id. at § C(1)(d). Request No. 2, id. at § C(2). Request No. 3(a), id. at § C(3)(a). Request No. 3(b), id. at § C(3)(b). Request No. 4, id. at § C(4).

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The Subpoena seeks this detailed and voluminous documentation for a period of nearly four years, from January 1, 2010 to the present.28 The Subpoena claims that the materials demanded, like office building sign-in sheets, are “relevant and material to an investigation and inquiry undertaken in the public interest.”29 ARGUMENT I. THE SUBPOENA SHOULD BE QUASHED BECAUSE IT EXCEEDS THE COMMISSION’S STATUTORY AUTHORITY UNDER NEW YORK EXECUTIVE LAW. A. The Subpoena Constitutes an Unconstitutional Intrusion Into the Affairs of the Legislature by the Executive Branch and Exceeds the Jurisdiction Afforded to the Executive Branch by the Moreland Act.

The Subpoena is invalid because it was issued by a Commission created by Governor Cuomo in excess of the his jurisdiction under the Moreland Act. The Commission’s objective to investigate the Legislature blatantly violates New York’s separation of powers doctrine. Further, the Subpoena itself improperly pursues indirectly through Harris Beach what the Commission is forbidden from pursuing directly from Senator Nozzolio. i. Governor Cuomo’s Grant of Authority to the Commission to Investigate The Legislature Exceeds the Governor’s Jurisdiction Under the Moreland Act.

Coercive tactics aside, because the Commission was formed for an unlawful purpose—to allow the Executive Branch to investigate the Legislature—any such jurisdiction it seeks to assert over Harris Beach directly and Senator Nozzolio indirectly is unlawful. An administrative agency or body derives its authority or power to act from the express dictates of the Legislature. See Suffolk County Builders Assn. v. County of Suffolk, 46 N.Y.2d 613, 620 (1979); see also In re New York State Superfund Coalition v. New York State Dept. Of

28 29

Id. at § C. Subpoena, at 1 (emphasis added).

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Envtl. Conservation, 75 N.Y.2d 88, 92 (1989) (the delegation of authority to an agency or body must strictly “coincide with its enabling statute”). The agency or body may not act in

contravention of the will of the Legislature or broaden what the applicable legislative scheme permits. See Finger Lakes Racing Assn. v. New York State Racing & Wagering Bd., 45 N.Y.2d 471, 480 (1978); People ex rel. Spitzer v. Grasso, 42 A.D.3d 126, 136-39 (1st Dep’t 2007) (noting the Legislature’s “plenary authority over its choice of goals and the methods to effectuate them”). In Grasso, the First Department considered whether the Attorney General exceeded the authority granted to him under Not-For-Profit Corporation Law (N-PCL) in pursuing nonstatutory claims against the former chairman and chief executive officer of the New York Stock Exchange (NYSE), a not-for-profit corporation, for his allegedly excessive compensation. See Grasso, 42 A.D.3d at 127-34. The court recognized that the N-PCL expressly confers authority upon the Attorney General to bring certain causes of action against not-for-profit directors or officers for excessive compensation, but that all claims contemplated entail a faultbased determination of liability. 42 A.D.3d at 139-40. The court held that the Attorney General lacked authority to bring the non-statutory claims because they would impose liability on Grasso without regard to the fault-based requirements or would otherwise “circumvent the substantive standards for the liability of directors and officers established by the Legislature.” 42 A.D.3d at 141. The Grasso Court reasoned that “[b]ecause the Legislature has not been completely silent but has instead made express provision for civil remedy, neither the judiciary nor the executive branch should attempt to fashion a different remedy, with broader [liability].” 42 A.D.3d at 141 (internal quotations omitted). Further, because the claims crafted by the Attorney General

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circumvented the core provisions of the N-PCL legislative scheme governing the duties and liabilities of directors and officers of not-for-profit corporations, they were inconsistent with the principle of separation of powers. 42 A.D.3d at 140. Here, the Moreland Act permits investigations by the Governor into the affairs of any “department, board, bureau or commission of the state” (N.Y. Exec. Law § 6). By expressly limiting the scope of the Act to the Executive Branch of the state, an irrefutable inference must be drawn that the authority granted by the statute does not extend to permit investigations of the Legislative Branch. See Raynor v. Landmark Chrysler, 18 N.Y.3d 48, 56 (2011) (“Where a statute describes the particular situations in which it is to apply and no qualifying exception is added, an irrefutable inference must be drawn that what is omitted or not included was intended to be omitted or excluded.”) (citation omitted); Grasso, 42 A.D.3d at 135-36 (applying the doctrine of expressio unius est exclusio alterius to preclude the Attorney General from engaging in “the exercise of powers not thus expressly conferred” by the N-PCL). To interpret the Moreland Act as granting the Executive Branch jurisdiction to investigate the Legislature would result in plain contravention of New York’s separation of powers doctrine. See Grasso, 42 A.D.3d at 140; E. Breuer, Moreland Act Investigations in New York: 1907-65 (1965) at pp. 29 (“By now it should be apparent that the Moreland Act relates solely to State administrative offices [and] has nothing to do with the . . . Legislature.”), 32 (noting the state legislature and judiciary branches are not subject to Moreland Act investigations). ii. The Executive Order Impermissibly Relies on Executive Law Section 63(8) As Authority to Pursue Indirectly, Through the Attorney General, What the Governor is Forbidden From Pursuing Directly Under the Moreland Act.

Executive Order 106 invokes Executive Law Section 63(8) as alternate authority for the Commission’s investigation of the Legislature on the rationale the matters under investigation,

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i.e., those identified in Paragraph II of the Order, involve issues of “public peace, public safety, and public justice.” Executive Order 106, Section I. However, the Governor may not invoke Section 63(8) of the Executive Law to have the Attorney General investigate these matters when Section 6 does not grant him that authority. The State or its instrumentalities may not pursue indirectly what the State is prohibited from pursing directly. See In re Diamond Asphalt Corp. v. Sander, 92 N.Y.2d 244, 257 (1998) (reiterating the Court of Appeals’ “expressed concern that public officials not be permitted to do indirectly what they may not do directly”); Tierney v. Cohen, 268 N.Y. 464 (1935) (“What the city cannot do directly, an agency or authority cannot do indirectly.”); Grasso, 42 A.D.3d at 140 n.9 (the Attorney General’s position that he could assert non-statutory claims at odds with legislative scheme “call[ed] to mind the venerable prohibition on public officials doing indirectly what they are forbidden from doing directly”); In re of Attorney Gen. of State of N.Y., 269 A.D.2d 1, 9 (1st Dep’t 2000) (“States cannot be allowed to do indirectly what they cannot do directly . . . .”). State officials are thus forbidden from evading the purpose of a statute “by merely altering the nature of an arrangement to bring it technically outside the scope of the requirements.” In re Diamond Asphalt Corp., 92 N.Y.2d at 256-57 (holding that New York City Commissioner of Department of Transportation could not “extend coverage of the [public bidding] statute into areas unintended by the Legislature” by applying it to private interference utility work). Here, Governor Cuomo merely fashioned a procedural arrangement (i.e., an Attorney General controlled investigation) as a means to bring the Commission technically outside the restrictions imposed on a Governor-controlled investigation under the Moreland Act. Attorney General Schneiderman himself admits that “the whole point of the Governor getting [him]

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involved in this venture [is] so that they can go beyond the Executive Branch and look at matters in the Legislature or the Judicial Branches . . . .” Interview with Attorney General

Schneiderman, Capital Pressroom with Susan Arbetter (Nov. 12, 2013) (“it does require a little bit of thoughtfulness about how you get the Legislature at the end of the day to cooperate”).30 That Governor Cuomo invoked Section 63(8) by directing the Attorney General to conduct an investigation of “political corruption” in the name of the “public interest” does not change the fact the Commission represents a Governor-directed investigation of the Legislature in violation of the Moreland Act. See Grasso, 42 A.D.3d at 142 (“[T]he authority to bring suit in what the Attorney General perceives to be in the interest of the state cannot trump contrary determinations about the public interest made by the Legislature.”). The Subpoena must be quashed so as to prohibit the Governor’s improper invocation of Section 63(8) as a means to expand his jurisdiction under the Moreland Act and permit an unconstitutional investigation of the Legislature by the Executive Branch. See Tze Chun Liao v. New York State Banking Dept., 74 N.Y.2d 505, 510 (1989) (Banking Department could not deny check casher license to owner of stationery store on grounds of “destructive competition” where such ground was not included in criteria expressly enumerated by legislature for license qualification); Grasso, 42 A.D.3d at 142 (noting that although executive branch officials may bring suit to enforce the law, they do not enjoy “the quintessentially legislative authority to alter the law”) (emphasis in original); Temp. State Comm'n on Living Costs & Econ., 80 Misc. 2d at 453-54 (quashing subpoena where facts indicated the investigation was an improper criminal investigation, outside the commission’s jurisdiction, and an abuse of process).
30

In his interview with Ms. Arbetter, Attorney General Schneiderman did not articulate what authority supported his conclusion that “as a legal matter, there’s no question in my mind that The Moreland Commission has the ability to – to inquire into matters relating to the Legislature.” Interview with Attorney General Schneiderman, Capital Pressroom with Susan Arbetter (Nov. 12, 2013)

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iii.

The Subpoena Pursues Indirectly, Through Harris Beach, What the Commission is Forbidden from Pursuing Directly, From Senator Nozzolio.

That the Subpoena is not directed to Senator Nozzolio only confirms the Commission recognizes the separation of powers and jurisdictional problems manifest in a Governor-directed subpoena aimed at investigating a legislator. By merely altering the recipient of the Subpoena so that it technically is not directed to a legislator, the Commission is nonetheless encroaching on the independence of the Legislature. See In re Diamond Asphalt Corp., 92 N.Y.2d at 257. The Commission could not directly subpoena Senator Nozzolio for the documents concerning his professional services and outside income. It is similarly forbidden from indirectly seeking those documents from Harris Beach. See Grasso, 42 A.D.3d at 140 n.9; In re Office of Attorney Gen. of State of N.Y., 269 A.D.2d at 911 (quashing subpoenas served by Attorney General in connection with investigation into potential claims against manufacturers for violations of federal standards on ground that claims were federally preempted by Clean Air Act and relying in part on the rationale that “States cannot be allowed to do indirectly what they cannot do directly”). For these reasons, as well as the facts and arguments asserted by the New York State Senate,31 which are incorporated herein in their entirety, the Subpoena must be quashed. B. The Subpoena was Improperly Issued to Implement Governor Cuomo’s Coercive Strategy To Effect Legislative Reform.

From this Commission’s beginning in July 2013, Governor Cuomo’s ultimate purpose for the Commission was clear: it would serve as a tool to coerce the Legislature into passing the package of reform legislation that it chose not to consider or enact. In a July 2, 2013 press release announcing the formation of the Commission, the Governor stated: “. . . I said I would
31

These facts and arguments, which appear in the Memorandum of Law submitted by the New York State Senate in connection with its separate action challenging the Subpoena, are incorporated in their entirety herein.

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not accept a watered-down approach to cleaning up Albany and that the Legislature must either pass this legislative package or I would empanel an investigative commission tasked with accomplishing these same goals to achieve reform.” As this rhetoric of intimidation continues unabated, it has become all the more apparent that the Commission’s true purpose is to enforce new rules that the Governor hoped his proposed legislation would have effected. For example, the Governor’s proposed legislation would not have imposed heightened disclosure requirements specifically on legislators or their outside employers, but the Subpoena seeks to do just that. Recent statements from the Governor reveal that the Commission’s purported policy-making impact is but a façade: “I’d still like them to pass legislation because that's how you change things . . . . I don't really need another

commission. I don't really need a lot of additional prosecutors. Really I would like to make systemic reform once and for all.”32 Attorney General Schneiderman’s statements in a

November 12, 2013 interview with Susan Arbetter further support the conclusion that the Commission’s goal is to force legislative reform: Obviously, you know, it’s a – it’s a – it’s a tricky game because you want to investigate early and make sure all – everything – that potentially could be the subject of reform . . . but you have to do it in a way that – with the understanding that ultimately the reforms are gonna have to be passed by the Legislature and signed by the Governor. . . . But as a matter of strategy and really just trying to get the best reforms possible, it – it does require a little bit of thoughtfulness about how you get the Legislature at the end of the day to cooperate.33 When the threats and actions are aside, and the Subpoena’s intrusive and coercive nature exposed, it is clear that the Commission’s purpose is improper. Governor Cuomo’s use of the
32

33

Kenneth Lovett, Gov. Cuomo Expects Challenges To Anti-Corruption Commission Subpoenas, New York Daily News (Oct. 21, 2013), http://www.nydailynews.com/blogs/dailypolitics/2013/10/gov-cuomo-expectschallenges-to-anti-corruption-commission-subpoenas. Interview with Attorney General Schneiderman, Capital Pressroom with Susan Arbetter (Nov. 12, 2013).

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Commission as a coercive tactic to force legislative reform constitutes an unlawful exercise of his delegated authority. See New York Statewide Coalition of Hispanic Chambers of Commerce v. New York City Dept. of Health and Mental Hygiene, 110 A.D.3d 1, 16 (1st Dep’t 2013) (holding that the New York City Board of Health “overstepped the boundaries of its lawfully delegated authority” and violated the principle of separation of powers in promulgating the “Portion Cap Rule” to curtail the consumption of soda drinks where Board acted in area where legislature had tried but failed to act). C. The Subpoena was Improperly Issued Prior to the Commission’s Promulgation of Rules and Procedure.

The Subpoena must be quashed because it was improperly issued before the Commission promulgated procedures and rules, as it was required to under Executive Order 106.34 Pursuant to Executive Order No. 106, Governor Cuomo granted the Commissioners who served as Deputy Attorneys General the power to subpoena and to require the production of any books or papers deemed relevant or material.35 These powers, however, were subject to two conditions

precedent: “that (1) the Co-Chairpersons shall unanimously approve any subpoena prior to its issuance; and (2) the Co-Chairpersons shall unanimously approve such procedures and rules as they believe necessary to govern the exercise of the powers and authority given or granted to the Commissioners…. including rules designed to provide transparency while protecting the integrity of the investigation and rights to privacy.”36 Upon information and belief, the CoChairs have never approved or published any such rules, and thus the Commission lacked the

34

35 36

Petitioner incorporates in this motion all of the arguments and facts asserted in New York State Senate’s Complaint for a Declaratory Judgment and Memorandum of Law in Support of the Motion to Quash, in their entirety Exec. Order No. 106, § V. Id.

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statutory authority to issue the present Subpoena.37 See Nicholson v. State Comm'n on Judicial Conduct, 68 A.D.2d 851, 852 (1st Dep’t 1979) (quashing subpoena, with respect to certain requests, because the commission lacks jurisdiction, given the statutory “conditions prerequisite to the commission’s investigation . . . have not been met.”) Accordingly, the Commission had no authority to issue the Subpoena and it is per se unenforceable. II. THE SUBPOENA SHOULD BE QUASHED BECAUSE IT IS NOTHING MORE THAN AN IMPERMISSIBLE FISHING EXPEDITION. A. The Commission Has No Factual Predicate to Support the Subpoena.

As confirmed by the First Department, “the issue of broad, sweeping subpoenas without a preliminary showing of authority, relevancy and some basis for the inquisitional action might too easily subject innocent parties to administrative abuses in violation of their rights to privacy and due process, and would amount to a roving cause of inquiry that is both burdensome and oppressive.” Nicholson v. State Comm'n on Judicial Conduct, 67 A.D.2d 649, 650-51 (1st Dep’t 1979) (citations and quotation marks omitted). To prevent such administrative abuse, New York courts require a factual basis to support a non-judicial investigative subpoena. See, e.g., N.Y. Shredding Corp. v. NYC Dep’t of

Investigation, 184 Misc. 2d 174, 182 (Sup. Ct. N.Y. County 2000) (“A motion to quash a nonjudicial investigatory subpoena requires the issuer to come forward with a factual basis to establish the relevancy of the items sought to the subject matter of the investigation.”); Myerson, 33 N.Y.2d at 258; see also Harlem Teams for Self-Help, Inc. v. Dep’t of Investigation of City of N.Y., 122 Misc. 2d 1066, 1070 (Sup. Ct. N.Y. County 1984) (“[W]hen an office subpoena is challenged, the burden is on the issuer to come forward with a factual basis which establishes
37

In its November 1, 2013 letter to the Commission, Harris Beach requested that the Commission provide those procedures and rules to help reassure the public that the Commission’s work would be conducted with the transparency and integrity that Executive Order 106 promises. Sleight Aff., Exhibit D. The Commission responded in its letter to Harris Beach, dated November 6, 2013, that it “is not obliged to adopt procedure to govern the exercise of its powers.” Sleight Aff., Exhibit E.

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relevancy before a person can be compelled to turn over the subpoenaed materials”) (internal citations and quotations omitted). In issuing a subpoena, “[i]t is simply not enough that the proponent merely hopes or suspects that relevant information will develop.” Future Tech. Assocs. v. Special Comm’r of Investigation for N.Y.C. Sch. Dist., 115054/2010, 2011 N.Y. Misc. LEXIS 1352, *13 (Sup. Ct. N.Y. County March 17, 2011). Simply put, New York courts will not permit a non-judicial subpoena power to be used “for the proverbial fishing expedition to ascertain the existence of evidence.” Brodsky v. N.Y. Yankees, 26 Misc. 3d 874, 887 (Sup. Ct. Albany County 2009) (internal quotation marks omitted). Yet a fishing expedition is exactly what the Commission seeks, given it issued the Subpoena in the absence of any evidence of wrongdoing by Harris Beach, whether in connection with its association with Senator Nozzolio or otherwise. The sole basis upon which the

Commission relies is an unfounded inference drawn from Senator Nozzolio’s failure to accede to the Commission’s letter of August 27, 2013. In a September 20, 2013 statement on behalf of the Commission, Commission Spokesperson Duffy declared: “The New York State Legislature has refused to turn over the information requested by the Moreland Commission revealing their outside clients. As the old adage goes, if you’ve done nothing wrong, you have nothing to hide.” Such an empty factual basis does not entitle the Subpoena to judicial enforcement.38 See Naples v. Whelan, 100 A.D.2d 743, 744 (4th Dep’t 1984), aff'd, 63 N.Y.2d 891 (1984) (granting motion to quash office subpoena where respondent showed no more than a “barren basis” that

38

Both the Commission’s August 27, 2013 letter to legislators and the Subpoena are each conspicuously void of any rationale or factual predicate for the underlying investigation. The August 27, 2013 letter states that legislators are permitted to earn outside income in addition to their legislative activities, and adds, without citation to any case or authority, that “[m]any of the issues that arise concerning public ethics involve the confluence of public and private activity.” See Sleight Aff., Exhibit A. In fact, the Subpoena provides even less explanation, stating only that the Commission believes the requested materials are relevant to its investigation, and directing the recipient to paragraph II of Exec. Order No. 106 for a “general statement of the subject of the investigation.” See Subpoena, at 1.

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could not justify enforcement of the subpoena); N.Y.C. Dep't of Investigation v. Passannante, 148 A.D.2d 101, 105 (1st Dep’t 1989) (quashing non-judicial investigatory subpoena where the only detail offered as a factual basis was an assertion that the investigation was based on the receipt of “various and specific allegations,” unidentified as to source or content). Here, the Commission does not, and cannot, make the requisite factual showing that would justify the issuance of this Subpoena. Neither the Subpoena, Exec. Order No. 106, nor the statements by the Commissioners has ever described reports or allegations of political corruption or wrongdoing by or on behalf of Harris Beach in connection with its association with Senator Nozzolio. Highly-publicized and totally unrelated corruption charges involving other elected officials prompted Governor Cuomo to propose his ethics legislation. When those efforts failed, he formed the Commission.39 There is, however, no evidence or factual predicate that any of those incidents involved behavior by a law firm, nor is there any link at all between such conduct and either Senator Nozzolio or Harris Beach. See Nicholson, 67 A.D.2d 649 (quashing subpoena requesting virtually all documents related to a judicial campaign where the alleged basis for the inquiry was one complaint by a fundraiser). B. The Admission That the Subpoena is Part of a Criminal Investigation Subjects the Subpoena to a Heightened Evidentiary Threshold That the Commission Cannot Satisfy.

Not only is the Commission unable to satisfy the requisite showing of relevancy and materiality needed to enforce a civil investigatory subpoena, it is wholly unable to satisfy the heightened showing necessary for a subpoena related to a criminal investigation.
39

If this

See, e.g., Yancey Roy, Skelos: No ‘witch hunt’, Newsday (July 2, 2013), at A34 (“Cuomo said the [Moreland Commission’s] inquiry is needed to restore trust in government after a string of indictments and convictions of state legislators.”). The Governor has also reinforced the fact that the majority of the Commissioners are prosecutors. E.g., Glenn Bain and Kenneth Lovett, Cuomo Believes Anti-Corruption Commission Can Force Politicians to Give Details on Outside Incomes, New York Daily News (Sept. 24, 2013), http://www.nydailynews.com/news/politics/cuomo-commission-details-pols-incomes-article-1.1465539 (“They are prosecutors. When they say they have other avenues [to obtain the requisite information], it means they have other avenues. . . . ”).

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Subpoena and the others issued by the Commission are indeed part of a criminal investigation, as Commission Co-Chairperson Fitzpatrick, the sitting District Attorney for Onondaga County, described in a recent interview,40 a stronger showing from the Commission is required. See Harlem Teams, 122 Misc. 2d at 1075-77 (where materials sought are in preparation for or in aid of a criminal prosecution, the issuer must make a stronger requisite showing to defeat a motion to quash). “[W]here the purpose of the subpoena is not investigatory, but rather to obtain evidence for use against a person the authorities already believe guilty of criminal activity, courts must apply” a heightened standard, closer or equal to probable cause. Id. at 1073. Accordingly, to the extent that the Subpoena is “more than a preliminary civil investigation” but is actually part of a criminal inquiry, the Commission cannot meet its heightened standard of factual background, materiality and relevance required to be enforceable. See Harlem Teams, 122 Misc. 2d at 1082 (quashing office subpoena probing criminality because it could not satisfy the heightened requirement); Temp. State Comm'n on Living Costs & Econ. v. Bergman, 80 Misc. 2d 448, 453-54 (Sup. Ct. N.Y. County 1975) (same). Simply put, the Commission served the far-reaching and intrusive Subpoena on Harris Beach solely because of the firm’s association with Senator Nozzolio. accordingly quash the Subpoena. C. The Information Demanded of Harris Beach Is Too Far-Reaching and Bears Little to No Relevance to the Commission’s Purported Purpose. This Court should

Not only is the Subpoena part of an improper fishing expedition, but its broad demands bear little or no relevance to the Commission’s purported purpose. To be valid, a strong factual predicate must underlie the Subpoena. Myerson, 33 N.Y.2d at 258 (the showing of factual basis
40

When asked about the Commission’s subpoenas in a radio interview on October 22, 2013, Fitzpatrick stated: “. . . I’m a little reluctant to talk about subpoenas because this is—and it’s hard—partially a criminal investigation.”

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that must be made is “related to the breadth of the inquiry and the extent of the investigation preceding the subpoena.”) (citations omitted). New York courts require that that (1) the factual basis is sufficient in light of the breadth of the subpoena; and (2) the material sought is relevant and necessary to the investigating body’s purported purpose. See, e.g., id. at 256-57; Naples, 100 A.D.2d at 744 (granting motion to quash office subpoena where respondent failed to establish a sufficient factual basis and demonstrate that the material sought is relevant or material). For example, Request No. 1 seeks, for a period of nearly four years, Documents and Communications41 relating to Senator Nozzolio’s professional services—i.e., every document and communication that Harris Beach has relating to its association with Senator Nozzolio during that period. Given this breadth, most (if not all) of the responsive documents and communications will be mundane business-related documents and communications, neither relevant nor material to the Commission’s investigation into public corruption. In short, the Subpoena is “too far reaching and constitute[s] an improper fishing expedition on the Commission’s part.” 2961 Realty Corp. v. Temp. Comm'n of Investigation of State of N.Y., 115 Misc. 2d 768, 772 (Sup. Ct. N.Y. County 1982) (refusing to enforce subpoena’s request of corporate minutes, tax returns and financial statements, on the grounds that the requested material was too far-reaching and not relevant to investigation into alleged arson for profit scheme); In re Office of Attorney Gen. of State of N.Y., 269 A.D.2d 1, 12-13 (1st Dep’t 2000) (quashing subpoena issued by Attorney General where the materials sought were “irrelevant to a legitimate subject of inquiry”). The Subpoena goes well beyond the Senator Nozzolio’s professional service. It also demands Documents and Communications sufficient to show any relationship, contact, business,

41

The Subpoena defines Documents and Communications in the “broadest sense of the term[s].” See infra Section II.B.

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funding, litigation, lobbying or other contacts with State entities, agencies, committees and contacts that either Harris Beach, its members, and its clients may have had, even if such contacts and/or activity were wholly unrelated to the member’s affiliation with the firm, or the client’s retention of an attorney at the firm.42 Moreover, any such “contacts” or “relationships,” neither of which the Subpoena defines, may include interactions or communications with lowlevel government employees who lack any discretion or authority that could render the contact’s attenuated relationship to the firm or Senator Nozzolio “relevant” or “material” in the Commission’s investigation of public corruption. Accord, Horn Constr. Co. v. Fraiman, 34 A.D.2d 131, 133-34 (1st Dep’t 1970), aff'd, 29 N.Y.2d 559 (1971) (quashing subpoena upon an insufficient showing of necessity, materiality or relevance, where subpoena sought all records of payments made on any and all jobs of construction company during a one-year period, regardless of whether the records pertained to the job contract at issue). Where an agency seeks to use its subpoena power in an attenuated manner, such that it could “subpoena anyone, or any agency that receives money from a private entity that receives some money from the [government]”—as the Commission purports to do here—a much greater showing of a factual basis and relevancy is required. See Passannante, 148 A.D.2d at 105

(quashing non-judicial investigatory subpoena because much more was required by the agency to warrant judicial enforcement of the broad-reaching subpoena; for under the agency’s rationale, it could subpoena not only “the obvious entities receiving money from the City . . . but literally thousands of health facilities, and child care agencies, who in turn do business with private entities”)

42

Request Nos. 2-3; see also infra, Section II.B.

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The Subpoena is not just far reaching, it is invasive. For example, Request No. 1(f) demands “building access records (electronic or otherwise) for Senator Nozzolio, sign-in sheets for Senator Nozzolio, or Documents reflecting other means by which Senator Nozzolio gains access to Harris Beach’s premises.” There is no plausible factual basis to assert that, solely because it has an affiliation with a state legislator, a private law firm’s building sign-in sheets and access are relevant to an inquiry into public corruption. And yet, recent remarks by

Commission Co-Chair William Fitzpatrick indicate the Commission’s rationale for this request is a suspicion that legislators with outside law practices are getting paid not for their legal services, but rather, for some corrupt activity: “[W]e simply want to know what you do for these retainers – these massive, we’re not talking about $5,000 retainers like someone would get for a small criminal case. We’re talking about 6-figure retainers from people that as far as we know, never go to court. And we would like to know from those who are honest legislators, who have trial firms, what do you do to earn it.” Putting aside a number of sheer absurdities in CoChairman Fitzpatrick’s statement—“trial firms” being but one—the utter lack of relevance of what time Senator Nozzolio might enter and exit Harris Beach’s office underscores the baseless nature of the Subpoena, and precisely why it must be quashed. III. THE SUBPOENA MUST BE QUASHED BECAUSE IT NOT ONLY DEMANDS PRIVILEGED AND CONFIDENTIAL MATERIAL, BUT IT IS OVERLY BROAD, VAGUE, UNDULY BURDENSOME AND OPPRESSIVE. Under New York law, a person or entity subject to a non-judicial subpoena may challenge it in on multiple grounds, including: it seeks privileged or confidential material, or irrelevant or immaterial documents; or it is overly broad, unduly burdensome or oppressive. See, e.g., Lerner v. Lerner, 90 A.D.2d 452, 454 (1st Dep’t 1982); Myerson, 33 N.Y.2d at 257; Horn Constr. Co., 34 A.D.2d at 133-34; Reuters Ltd. v. Dow Jones Telerate, Inc., 231 A.D.2d 337, 344-45 (1st Dep’t 1997). -22-

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A.

The Subpoena Demands Disclosure of Confidential, Privileged and Proprietary Information.

The Subpoena should be quashed because it improperly demands highly confidential material that in most instances will likely be protected by the attorney-client and other privileges. Production by Harris Beach would violate ethical obligations to preserve client confidences, privileged communications and work-product. As the First Department has acknowledged, a lawyer’s “ethical obligation to maintain the confidences and secrets of clients and former clients is broader than the attorney-client privilege, and exists without regard to the nature or source of the information or the fact that others share in the knowledge.” E.g., Wise v. Consolidated Energy Co. of N.Y., 282 A.D.2d 335, 335 (1st Dep’t 2001) (internal citations and quotations omitted); see also Pavillion Agency, Inc. v. Spitzer, 9 Misc. 3d 626, 633-34 (Sup Ct. New York County 2005) (holding that even though subpoenas issued by Attorney General to worker referral service as part of investigation of discrimination within domestic worker placement industry were enforceable, Attorney General was not entitled to disclosure of information which might reveal the identities of service’s clientele). In Pavillion Agency, the court held that to allow disclosure of the service’s clientele would “open the floodgates with respect to issues of client confidentiality and potential harassment” and “would effectively promote government interference with the most personal kind of employment relationships . . . . ” Pavillion Agency, Inc., 9 Misc. 3d at 633. Rule 1.6 of New York’s Rules of Professional Conduct prohibits lawyers from knowingly revealing confidential information absent client consent. Rule 1.6 defines “confidential

information” as information gained during or relating to the representation of a client that: (a) is protected by the attorney-client privilege; (b) is likely to be embarrassing or detrimental to the client if disclosed; or (c) that the client has requested be kept confidential. Further, the Public

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Integrity Reform Act specifically exempts licensed professionals, including attorneys, from disclosing the names of their clients. N.Y. Pub. Off. Law § 73-a(8)(b)(v). Here, many of the documents sought by the Subpoena are likely “confidential information” within the meaning of Rule 1.6. For example:  Request No. 1 seeks Documents and Communications relating to professional services provided by Senator Nozzolio, and the Subpoena expressly defines “Communication” and “Document” “in the broadest sense of the term[s].” In this respect, the Commission demands every e-mail, document, oral communication or discussion, whether recorded or not, between Senator Nozzolio and his clients, as well as all work product created for and in the course of Senator Nozzolio’s legal representation of his clients. Much of this material is likely privileged or confidential material. See, e.g., Cunningham & Kaming, P.C. v. Nadjari, 53 A.D.2d 520, 520 (1st Dep’t 1976) (noting that “a subpoena calling for production of records of a law firm . . . pose[s] a threat to confidentiality of the attorneyclient relationship”). Request No. 1(c) seeks invoices, billable hour reports and timesheets, many of which describe specific tasks undertaken in the course of legal representation. Under New York law, time records and billing statements that detail the services provided, conversations, and conferences between counsel and others, thus revealing legal work that has been done and/or trial strategy, are protected by the attorney-client privilege. DiBella v. Hopkins, 403 F.3d 102, 120 (2d Cir. 2005). Request No. 1(e) seeks material regarding Senator Nozzolio’s clients, including a general description of the services provided to them. Request No. 3(b) seeks Documents and Communications showing clients that have engaged Harris Beach in requests for funding, lobbying activity, proposed, draft or enacted legislation, or any other legislative or political activity. However, New York ethics rules instruct attorneys not to disclose the identity of a client or the fact of retention if it could be embarrassing or detrimental to the client, or where the client specifically requested such information be withheld. See N.Y. Eth. Op. 645, 1993 WL 560284 (May 3, 1993). For example, the fact that a client has consulted a criminal defense lawyer or a divorce lawyer should be kept secret if it is embarrassing or detrimental. Id. Accordingly, complying with the Subpoena would require Harris Beach and its members to breach its ethical obligation of confidentiality—exactly what Rule 1.6 seeks to prevent. See Pavillion Agency, Inc., 9 Misc. 3d at 633. For this reason, the Subpoena should be quashed. See, e.g., Lerner, 90 A.D.2d at 452 (quashing portion of information subpoena served on counsel on

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basis of attorney-client privilege because what “services [were] rendered or [will] be rendered by counsel . . . exceeds the bounds on the scope of disclosure”).43 Of course, the Commission’s attempt to force attorney-legislators to breach their ethical obligations is in contravention of the Commission’s stated purpose of ensuring that New York’s government is “meeting the highest ethical and legal standards.”44 Forcing Harris Beach and other firms to breach their duties of confidentiality is incompatible with such goals, particularly where no one client or firm is the target of the Commission’s investigation. See Straus v. Ambinder, 61 A.D.3d 672 (2d Dep’t 2009) (affirming grant of protective order where subpoenaed documents were protected by the attorney-client privilege); Mahoney v. Staffa, 184 A.D.2d 886, 887 (3d Dep’t 1992) (quashing subpoena with respect to certain material because letters exchanged between Commission and attorneys were protected by the attorney-client privilege and not subject to disclosure). Rather, the Commission’s investigation, like the Subpoena itself, is nothing but a fishing expedition—indeed one that impermissibly casts a proverbial wide net into protected waters. B. The Subpoena is Overbroad, Vague and Unduly Burdensome.

Subpoenas that are overbroad and unduly burdensome are unenforceable. White Bay Enters. v. Newsday, Inc., 288 A.D.2d 211, 212 (2d Dep’t 2001) (quashing subpoenas that were “overly broad and unduly burdensome”). Even if the Commission had the authority to issue the Subpoena—and it does not—a finding of statutory authority “does not mean it has unlimited

43

44

At a minimum, any such material would have to be subject to a court’s in camera inspection prior to production. See Cunningham & Kaming v. Nadjari, 53 A.D.2d 520, 521-22 (1st Dep’t 1976) (upon motion to quash subpoena, requiring that trial court inspect in camera materials regarding claims of privilege to avoid a breach of confidentiality); Myerson v. Colonial Commercial Corp., 40 A.D.2d 972 (1st Dep’t 1972) (affirming order to comply with subpoena, as modified, and reserving decision on issue of confidentiality, in that the subpoena requested material protected by the attorney-client privilege, for trial court’s examination of the material). Thomas Kaplan, Cuomo Creates Special Commission to Investigate Corrupt Elected Officials, New York Times (July 2, 2013), at A22.

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power to issue subpoenas and obtain voluminous business records.” Brodsky, 26 Misc. 3d at 885, 891 (quashing overly broad subpoena issued by state legislative committee). Rather, “[t]he power to issue a subpoena compelling document production comes with the obligation to tailor any document requests with specificity so that the recipient can reasonably ascertain what documents to produce.” Id. at 888. But here, the Commission has neglected this important mandate to narrowly tailor its requests, resulting in an unenforceable Subpoena that is overly broad, vague, and unduly burdensome. First, the definitions in the Subpoena are so broad that when combined with other defined terms, they create requests so far-reaching that compliance would be onerous and all-consuming. For example, the Subpoena expressly defines “Communication” “in the broadest sense of the term,” including conversations, discussions and “other transmittal of information or message, whether transmitted in writing, orally, electronically or by any other means.”45 As such, the Subpoena includes information transmitted by oral communications, which may never have been previously recorded. Further, Harris Beach is defined as more than just a professional limited liability company or attorneys presently employed by Harris Beach: rather, the Subpoena

defines “Harris Beach” to include any of its representatives, agents, affiliates, present or former parents, subsidiaries, related entities, directors, officers, contractors, its “respective predecessors or successors or any of the affiliates of the foregoing.”46 By combining these two definitions in Request Nos. 2 and 4, the Subpoena purports to require the production of never transcribed oral communications between or among persons no longer in Harris Beach’s employment, and about which Harris Beach may never have had any knowledge.

45 46

Subpoena § A(2). Subpoena § A(1).

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Second, the Subpoena is overly broad and vague in that it combines these broad definitions into laundry-list requests that contain other confusing and undefined terms. For example, the Subpoena seeks Documents and Communications relating to “monies, benefits, or campaign contributions from Harris Beach, its members, or close relatives of its members, or any political organization or committee associated with Harris Beach, to New York state elected officials, political candidates, political entities, political campaigns, political action committees, political party organizations, or political clubs…”47 These requests are overly broad, vague and ambiguous, given that the terms “benefits,” “close relatives” and “political organization or committee associated with Harris Beach” are left undefined. Third, the Subpoena is unduly burdensome in that seeks this vast amount of information regardless any given relationship, activity or contribution may be wholly unrelated to Harris Beach or undertaken in a personal capacity.48 Such “minute particularization” sought by the Commission is completely unnecessary and bears little to no relation to the Commission’s purported purposes. See Fahy v. Comm'n to Investigate Allegations of Police Corruption & City’s Anticorruption Procedures, 65 Misc. 2d 781, 785-86 (Sup. Ct. N.Y. County 1971), aff'd, 36 A.D.2d 802 (1st Dep’t 1971) (finding schedule A of the non-judicial subpoena to be “particularly oppressive, unnecessarily burdensome and, in several instances, totally irrelevant” where subpoena sought “minute particularization” about police officer’s personal and family expenditures.) Indeed, as the court in Fahy concluded when it came to an examination of police officers’ household expenses in an investigation into police corruption, “while a large laundry
47 48

Request No. 4, id. at § C(4) (emphasis added). For example, while Request No. 2 seeks material showing any relationship, business, funding, litigation or contacts, on Harris Beach’s behalf, with the State, Requests No. 3(a) and 4 do not have the same limitation: Request No. 3(a) seeks material about any relationships, business, funding, litigation or contacts that clients have with the State (including in a personal capacity), and Request No. 4 seeks material related to campaign contributions and benefits from Harris Beach, its members, and close relatives of its members have made (including in a personal capacity) to political campaigns and elected officials. See Subpoena §§ C(2), (3)(a), (4).

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bill might be indicative of an aversion toward home laundering or of a penchant for cleanliness, it would have no bearing on whether corruption exists.” Id. Fourth, the Subpoena is unduly burdensome because Senator Nozzolio has already complied with his legal obligation to disclose certain information, and the Commission has no factual basis to show that the materials requested are relevant to its investigation. In 2011, the State Legislature enacted the Public Integrity Reform Act, which significantly expanded legislators’ financial disclosure obligations, including disclosure of outside employment and income. See N.Y. Pub. Off. Law Section 73-a.49 In particular, that Act requires disclosure of certain clients of the legislator or his outside employers who have conducted business with, received grants or contracts from, or were involved in proceedings before the State.50 However, and particularly relevant here, the law specifically exempts licensed professionals, including attorneys, from disclosing the names of their clients.51 The legislators must file their annual statements of financial interest with the Joint Commission on Public Ethics, which then makes the annual statements publicly available online.52 As described by the Governor’s press office, the law “establish[ed] unprecedented transparency . . . . and a strong independent monitor with broad oversight of New York State Government.”53 Senator Nozzolio submitted his 2012 annual statement of financial disclosure by the May 15, 2013 deadline. He is in full compliance with his

49

50

51 52

53

Governor’s Press Office, Governor Cuomo Signs Ethics Reform Legislation (Aug. 15, 2011), http://www.governor.ny.gov/press/08152011EthicsReformLegislation. The services rendered by the legislator must be in direct connection with the client’s business with, contract or grant from, or proceeding before the State, and the legislator must have received over $10,000 in fees for such services. N.Y. Pub. Off. Law § 73-a(3). Id. Governor’s Press Office, Governor Cuomo Signs Ethics Reform Legislation (Aug. 15, 2011), http://www.governor.ny.gov/press/08152011EthicsReformLegislation. Id.

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disclosure obligations under existing law.54 Enforcement of the Subpoena will impose undue burden by requiring Senator Nozzolio to disclose vast amounts of additional material, when he has already fulfilled his legal and ethical disclosure obligations under the law. C. The Subpoena Is Oppressive.

The Subpoena should be quashed because it is plainly oppressive. The law encourages clients to communicate openly with their attorneys on the assurance those communications will remain protected.55 Notwithstanding this, the Subpoena seeks to compel Harris Beach to breach that duty of confidentiality, not just with regard to one specific client, but to many clients. In this respect, the Subpoena “brings with it a real risk of disturbing the relationship” between Harris Beach and its clients, and “putting [Harris Beach] at a competitive disadvantage.” Reuters, 231 A.D.2d at 344-45. Given the lack of relevance of the documents requested to the perceived, the voluminous material that would need to be produced under the Subpoena’s excessively broad scope, and the threats by the Commission and the Governor when the legislators proposed a more targeted production of information, it is clear that this Subpoena is, and was intended to be, an oppressive and punitive investigative tool designed to interfere with the state legislators’ outside employment by placing their employers in an untenable position. See Reuters, 231 A.D.2d at 344-45 (quashing non-judicial subpoena on the grounds that it was “patently overbroad, burdensome, and oppressive” and could harm the business of the recipient).

54

55

As the State Senate and Assembly noted in a joint letter to the Commission on September 20, 2013, the legislators’ annual statements of financial disclosure are publicly available on JCOPE’s website. See http://www.jcope.ny.gov/elected%20officials/fdselectedofficials.html. See, e.g., Comment 2 to Rule 1.6 of New York Rules of Professional Conduct (the purpose for confidentiality is to encourage clients to “communicate fully and frankly with a lawyer, even to embarrassing or legally damaging subject matter. The lawyer needs this information to represent the client effectively.”)

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*

*

*

For the reasons described above, Petitioner respectfully requests that the Court quash the Subpoena in its entirety, and issue a protective order confirming that Harris Beach need not respond to it.

Dated Pittsford, New York November 21, 2013 HARRIS BEACH PLLC

By:/s/Karl J. Sleight Karl J. Sleight Philip G. Spellane James P. Nonkes Allison A. Bosworth 99 Garnsey Road Pittsford, New York 14534 Telephone: (585) 419-8800 Fax: (585) 419-8811

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