Opinion
Index No. 606293/2023
03-22-2024
In the Matter of Hofstra University, Petitioner, v. Nassau County Planning Commission, NASSAU COUNTY PLANNING DEPARTMENT, NASSAU COUNTY REAL ESTATE PLANNING AND DEVELOPMENT DEPARTMENT, NASSAU COUNTY ATTORNEY'S OFFICE, NASSAU COUNTY LEGISLATURE, and NASSAU COUNTY, Respondents.
Sarika Kapoor, J.
HON. SARIKA KAPOOR, A.J.S.C.
NYSCEF document nos. 137-143, 164, 168, and 171-195 were read and considered in deciding these motions.
Relief Requested
Motion Sequence 002: The petitioner, Hofstra University (hereinafter Hofstra), moves, by order to show cause, pursuant to CPLR 2304 and 3103 to quash a subpoena ad testificatum dated January 16, 2024, issued by the Rules Committee of the respondent Nassau County Legislature to Dr. Susan Poser, and for a protective order.
By joint stipulation so-ordered by this Court on February 26, 2024, Hofstra withdrew those branches of motion sequence 002 which were to quash two subpoenas duces tecum dated January 16, 2024 (NYSCEF 168).
Motion Sequence 004: Hofstra moves, by order to show cause, pursuant to CPLR 2304 and 3103 to quash four subpoenas duces tecum dated February 29, 2024, issued by the Rules Committee of the respondent Nassau County Legislature to Petrillo Klien + Boxer LLP, Rivkin Radler LLP, McBride Consulting & Business Development Group, and Colliers Engineering & Design, respectively, and for protective orders.
Background
The background of this hybrid proceeding pursuant to CPLR article 78 and action for related declaratory relief is more fully set forth in this Court's decision and order dated November 9, 2023 (NYSCEF 124), and in this Court's decision, order, and interlocutory judgment dated February 23, 2024 (NYSCEF 166).
On January 3, 2023, the New York Gaming Facility Location Board (hereinafter the Location Board) published its Request for Applications to Develop and Operate a Gaming Facility in New York State (hereinafter RFA). The purpose of the RFA is to solicit proposals for up to three casinos in New York State (NYSCEF 184 ¶ 6). According to the respondents, while three casino licenses are available, two currently existing "racinos"-gambling establishments that offer slot machines and electronic table games attached to racetracks-in Queens and Yonkers are leading contenders for the two of the licenses (NYSCEF 184 ¶ 7 n 1). Therefore, it is widely understood that the real competition is for the third license (NYSCEF 184 ¶ 7). Some of the nation's largest casino companies, including Wynn Resorts, Hard Rock, Sands, Caesars Entertainment, and Bally's have partnered with real estate developers throughout the downstate region to submit proposals for a casino license (NYSCEF 184 ¶ 7). According to the respondents, two of the leading contenders for the third license are Sands and a project sponsored by Steve Cohen-a financier and owner of the New York Mets-and the casino operator Hard Rock (NYSCEF 184 ¶ 7).
Each applicant for a casino license is required to submit a Non-Collusive Bidding Certification, in which applicants must certify that "[n]o attempt has been made or will be made by the Applicant to induce any other person or entity to submit or not submit an Application or Supplement to an Application for the purpose of restricting competition." On January 11, 2024, Newsday published an article indicating that a lobbyist and consultant of Hard Rock may have been communicating with Hofstra. Specifically, the article reported that, on January 5, 2024, Michael McKeon, a lobbyist and consultant for Hard Rock, forwarded a January 3, 2024 Newsday article to Hard Rock executives, and inadvertently included a Sands executive with a similar name on the email (NYSCEF 184 ¶ 17, 18). The January 3, 3024 Newsday article reported that Sands planned to move forward with the environmental review process in the Town of Hempstead pursuant to an assigned lease. In the body of the January 5, 2024 email, McKeon wrote, "I may not have forward [sic] this too [sic] you on Wednesday but it speaks to Sands' effort to control the [Nassau Coliseum] site, I am checking with Hofstra to see if they will oppose the move" (NYSCEF 184 ¶ 18).
Hofstra's motion for declaratory relief (motion seq. 003) with respect to the assigned lease is the subject of this Court's decision, order, and interlocutory judgment dated February 23, 2024 (NYSCEF 166).
On January 16, 2024, the Rules Committee of the Nassau County Legislature issued a subpoena ad testificatum to Dr. Susan Poser, the President of Hofstra (hereinafter the testimonial subpoena), and two subpoenas duces tecum, one to Poser and the other to Hofstra (hereinafter together the January document subpoenas). All subpoenas indicate that they were issued pursuant to County Law § 209, and are captioned, "IN RE: LEASE BETWEEN NASSAU COUNTY AND LVS NY HOLDCO2 LLC FOR THE DEVELOPMENT OF SECTION 44, BLOCK F, LOTS 351, 411, 412 AND 415." The testimonial subpoena directs Poser to appear in person before the Rules Committee of the Nassau County Legislature on January 22, 2024 (NYSCEF 140). On January 18, 2024, on the parties' consent, the return date of the testimonial subpoena was adjourned to February 26, 2024 (NYSCEF 146). Thereafter, by joint stipulation so-ordered by the Court on February 26, 2024, the return date of the testimonial subpoena was adjourned to March 25, 2024 (NYSCEF 168).
The January document subpoenas sought:
Any and all documents, correspondence, phone records, voicemails, instant messages, emails, text messages, letters, or other written communications by and between (A) any representative, attorney, employee, trustee, or lobbyist of Hofstra University and (B) Poser, and:
(1) any representative, attorney, lobbyist, employee, principal, board member, owner, or shareholder of:
a. Seminole Hard Rock Entertainment Inc., or any parent company, subsidiary, or affiliate thereof, including but not limited to Sean Caffery.
b. Actum, LLC, or any parent company, subsidiary, or affiliate thereof, including but not limited to Michael McKeon.
c. Point72 Asset Management L.P., or any parent company, subsidiary, or affiliate thereof including but not limited to Michael Sullivan.
d. New Green Willets, LLC, or any parent company, subsidiary, or affiliate thereof.
e. McBride Consulting and Business Development Group, or any parent company, subsidiary, or affiliate thereof, including but not limited to Greg Lavine, Louis Montes-Amaya, Robert McBride, and Rochelle Kelly-Apson.
(2) Steven Cohen, or any representative, attorney, lobbyist, or employee of Steven Cohen or of any company owned, managed, or controlled by Steven Cohen.(NYSCEF 138, 139).
By joint stipulation so-ordered by this Court on February 26, 2024, the parties agreed, inter alia, that the January document subpoenas would be limited to a time frame of April 1, 2022 to January 16, 2024, and would "be limited to those documents, correspondence, phone records, voicemails, instant messages, emails, text messages, letters, or other communications otherwise requested by the [January document subpoenas] and relating to one or more of the following subjects: (i) casino licenses; (ii) the development of the Nassau Hub or Citi Field sites; and (iii) the lawsuit Hofstra University v. Nassau County Planning Commission, et al., Index No. 606293/2023 (Nassau Cty. Sup. Ct)" (NYSCEF 168). Hofstra also withdrew those branches of motion sequence 002 which were to quash the January document subpoenas (NYSCEF 168).
In response to the January document subpoena issued to Poser, Poser produced screenshots of two text message conversations between herself on Robert McBride, a consultant to Hofstra (NYSCEF 176, 177). In one of the conversations, which appears to be from May 2023, McBride sent Poser a link to an article in the New York Post, showing the title of the article as, "Mets owner 'hires best team money can buy' to win a NYC ca" Poser replied, "You made my day. How can we help him and vice versa??" (NYSCEF 176). In the other text message conversation, from May 13, 2023, McBride sent Poser a link to an article in the New York Post, showing the title of the article as, "Ex-Hofstra President Stuart Rabinowitz's role in picki" McBride then stated, inter alia, "Hope Newsday tops this story with a twist!" Poser then stated, among other things, "Someone needs to tel [sic] Steve Coh[e]n that it is actually in his interest to agree with them. He can appear gallant and help himself at the same time," to which McBride replied, "Done!!!" (NYSCEF 177).
Thereafter, the Rules Committee of the Nassau County Legislature issued four subpoenas duces tecum dated February 29, 2024, to Petrillo Klien + Boxer LLP, the law firm representing Hofstra is this proceeding/action; Rivkin Radler LLP, which also represents Hofstra; McBride Consulting & Business Development Group, a former consultant to Hofstra; and Colliers Engineering & Design, a consultant to Hofstra, respectively (hereinafter collectively the February subpoenas). Like the subpoenas issued in January, the February subpoenas indicate that they were issued pursuant to County Law § 209, and are captioned "IN RE: LEASE BETWEEN NASSAU COUNTY AND LVS NY HOLDCO2 LLC FOR THE DEVELOPMENT OF SECTION 44, BLOCK F, LOTS 351, 411, 412, AND 415." The February subpoenas as seek:
The respondents state that counsel for the Nassau County Legislature informed counsel for Hofstra that a similar subpoena was also issued to Actum LLC. The respondents annexed a copy of this subpoenas to their opposition papers (NYSCEF 187). Following this Court's issuance of a stay of the return date of the February subpoenas (NYSCEF 182), the Nassau County Legislature agreed to adjourn the return date of the subpoena to Actum LLC while motion sequence 004 is pending (NYSCEF 186 ¶ 2 n 1).
Any and all documents, correspondence, phone records, voicemails, instant messages, emails, text messages, letters, or other communications that: (i) were created on April 1, 2022 or later; (ii) relate to one or more of the following subjects: (a) casino licenses; (b) the development of the Nassau Hub or Citi Field sites; and (c) the lawsuit between Nassau County and Hofstra University, Index. No. 606293/2023 (Nassau Cty. Sup. Ct.); and (iii) are by and between or among, or reflect any communications by and between or among, any representative, attorney, employee, principal, or lobbyist of [the subpoena recipient] and any of the following individuals or entities:
• any representative, attorney, lobbyist, employee, principal, board member, owner, or shareholder of Seminole Hard Rock Entertainment Inc., or any parent company, subsidiary, or affiliate thereof, including but not limited to Sean Caffery, Edward Tracey, Gina Massiel Cadahia, or Jonathan Goldman;
• any representative, attorney, lobbyist, employee, principal, board member, owner, or shareholder of Actum, LLC, or any parent company, subsidiary, or affiliate thereof, including but not limited to Michael McKeon;
• any representative, attorney, lobbyist, employee, principal, board member, owner, or shareholder of Point72 Asset Management L.P., or any parent company, subsidiary, or affiliate thereof including but not limited to Michael Sullivan; and/or
• any representative, attorney, lobbyist, employee, principal, board member, owner, or shareholder of New Green Willets, LLC, or any parent company, subsidiary, or affiliate thereof.(NYSCEF 178, 179, 188, 189).
Only the February subpoenas issued to Petrillo Klien + Boxer LLP and Rivkin Radler LLP were annexed as exhibits to motion sequence 004. The respondents annexed as exhibits to their opposition papers the subpoenas issued to Colliers Engineering & Design and McBride Consulting & Business Development Group (NYSCEF 188, 189).
The February subpoenas had a return date of March 8, 2024. On March 6, 2024, this Court stayed the return date of the February subpoenas pending the hearing and determination of motion sequence 004 (NYSCEF 182).
Motion Sequence 002 and 004
Hofstra's Arguments
Hofstra moves pursuant to CPLR 2304 and 3103 to quash the testimonial subpoena (motion seq. 002) and the February subpoenas (motion seq. 004) and for protective orders.
With respect to motion sequences 002 and 004, Hofstra first asserts that the subpoenas constitute an effort to circumvent the judicial process and the relief granted to Hofstra in this Court's decision and order dated November 9, 2023, which annulled the lease entered into by Nassau County as tenant and LVS Holdco 2, LLC, a holding company of Sands, as tenant. Hofstra asserts that the Nassau County Legislature lacks the authority to issue subpoenas to investigate the annulled lease, which has already been fully litigated. Second, Hofstra contends that the subpoenas constitute a transparent effort to harass and retaliate against Hofstra for having prevailed in this litigation. Hofstra notes that the subpoenas were issued during the time that Hofstra sought and obtained declaratory relief. Hofstra contends that the issuance of the subpoenas evidences an effort to inflict increasing costs and harm upon Hofstra so that it might forgo continuing to litigate before this Court. Third, Hofstra contends that no aspect of the annulled lease could properly be subject to "investigation" by the Nassau County Legislature. Hofstra contends that the subpoenas issue from the Rules Committee, whose function is to establish and approve rules of the Nassau County Legislature and committees thereof, to determine the order on the calendar of each proposed local law, ordinance, resolution or other item for consideration and action by the legislature, and to regulate the housekeeping practices and procedures; not to investigate communications concerning casino license applications. Were the topic of communications concerning casino license applications appropriate for any government entity to investigate, then that authority would properly sit at the New York State level, if anywhere.
Additionally, with respect to motion sequence 004, Hofstra contends that the February subpoenas violate the parties' joint stipulation which was so-ordered by this Court on February 26, 2023. Hofstra contends that, in negotiating the document production required pursuant to the January document subpoenas, the Nassau County Legislature agreed to a narrowed scope of production pursuant to which Hofstra would search for responsive documents from five custodians, namely, individuals employed by Hofstra, and that Hofstra would represent that no responsive documents were possessed by its inside legal department. In entering the stipulation, the Nassau County Legislature specifically agreed to a compromise that would not require the search for any responsive documents from outside lawyers or consultants as custodians.
The Respondents' Opposition
In opposition to both motions, the respondents assert that the subpoenas are related to a proper inquiry, because the County seeks to understand whether Hofstra is coordinating with a rival of Sands for a casino license. The respondents assert that the Nassau County Legislature is properly investigating whether the coordination between Hofstra and Hard Rock has violated any laws, including by seeking to reduce competition in the casino license application process. The respondents assert that Nassau County's potential partnership with Sands lies at the heart of the Nassau County Legislature's jurisdiction to develop its property. Additionally, while there is currently no lease between Nassau County and Sands, the respondents contend that a similar lease is likely to come into effect either if this Court's decision and order dated November 9, 2023, is reversed on appeal, or after the County completes the public hearing and environmental review steps contemplated by this Court's decision and order, and therefore, the County has authority to investigate matters relating to entering into such a lease. The respondents further contend that this litigation makes it harder for Sands to complete the myriad licensing, zoning, and environmental processes required to develop the Coliseum site and obtain a casino license, which benefits competing casino applicants like Hard Rock. Moreover, the respondents contend that leasing the Coliseum site to Sands to bring financial benefits to the County is within the Legislature's purview and, therefore, the Legislature's efforts to understand the communications between Hofstra and Hard Rock is plainly a proper inquiry that serves a public purpose. The respondents contend that any coordination potentially violated the New York Gaming Facility Location Board's anti-collusion requirements, and even if the County does not enforce that requirement, it is entitled to investigate whether violations affecting its interests have occurred and possibly refer those violations to New York State, and the County can use any violations as a reason why the Location Board should not grant a casino license to Hard Rock. The respondents assert that the Legislature is also entitled to start its inquiry with one of the participants in the potential violation, i.e., Hofstra, to gather facts before potentially questioning Hard Rock directly. Additionally, the respondents contend that since the County first issued subpoenas on January 16, 2024, the County has received evidence that, at Poser's personal direction, Hofstra's lobbyist contacted Cohen to strategize regarding their opposition to the Sands project. The respondents contend that the subpoenas are not an attempt to harass Hofstra, but rather, arose from the publication of a Newsday article that revealed contact between Hofstra and Hard Rock.
Additionally, in opposition to motion sequence 004, the respondents contend that Hofstra lacks standing to challenge the February subpoenas because those subpoenas seek materials that were not obtained from Hofstra. Rather, they seek communications between the subpoena recipients and various representatives of Hard Rock. Additionally, the respondents assert that the materials sought are not covered by any protective order, nor is there any proprietary interest, confidential relationship, or privilege with respect to them. The respondents further contend that Hofstra is precluded from making any such arguments for the first time in reply. To the extent that some limited number of responsive materials are privileged, those documents can be withheld or redacted, as appropriate. The respondents contend that, in situations like this, courts have consistently held that only the recipient of a subpoena has standing to challenge it. The respondents also contend that the February subpoenas do not violate the parties' joint stipulation that was so-ordered on February 26, 2023, because in that stipulation, the parties agreed that Hofstra would not have to search the files of its outside counsel, lobbyists, and counsel, and could instead search five designated custodians. The stipulation expressly reserved all rights as to any other subpoenas, and specifically stated that no negative inferences should be drawn from the parties' agreement to limit the scope of the January document subpoenas.
Hofstra's Reply
In reply, Hofstra argues, inter alia, that any investigation of collusion with casino applicants, if appropriate at all, falls within New York State jurisdiction, under section 1306 of New York Racing, Pari-Mutuel Wagering and Breeding Law. The Non-Collusive Bidding Certification that will be submitted by casino applicants will be submitted to the New York State Gaming Facility Location Board and, therefore, Hofstra asserts that oversight of the issuance of state casino licenses should be handled by New York State and not the Nassau County Legislature. Hofstra notes that the casino licenses can only be granted at the state level, and the Gaming Facility Location Board has the authority to conduct investigative hearings. Hofstra further asserts that it is not a casino applicant and, thus, is not restricted in its ability to communicate with potential casino bidders. Moreover, Hofstra contends that the Non-Collusive Bidding Certification concerns non-collusion between applicants regarding proposed tax rates contained in applications, and the respondents cannot stretch that restriction in a way that might encompass any conduct by Hofstra. Hofstra contends that, even if it did communicate with likely casino applicants that are in competition with Sands, such speech would not be improper. Hofstra contends that this purported investigation is actually retaliation against Hofstra, which is illustrated by the respondents' public relations tactics, as Nassau County Executive Bruce Blakeman held press conferences in connection with the issuance of the subpoenas at issue in motion sequences 002 and 004, and castigated Hofstra and Poser in his State of the County speech for commencing this litigation, but has not made any similar efforts to inform the public about this Court's decisions determining that the County violated the law.
Hofstra asserts that respondents continue to commit substantial resources to litigation, and now their investigation, rather than comply with this Court's decision and order dated November 9, 2023. Hofstra notes that, based upon press reports and documents obtained via FOIL, it appears that respondents have allocated $2.5 million for their law firm in this litigation, Sullivan & Cromwell LLP (NYSCEF 190 ¶ 23 n 5). Hofstra contends that, if the Nassau County Legislature genuinely sought to investigate the matter of communications with potential casino applicants, then the subpoenas would have been issued to those casino applicants, which has not occurred.
Regarding the February subpoenas, Hofstra asserts that their issuance violated the parties' joint stipulation which was so-ordered by this Court on February 26, 2024. Hofstra asserts that the January document subpoenas had encompassed Hofstra's outside law firms and consultants as custodians, and the parties agreed to narrow the custodians to five executives of Hofstra. Hofstra contends that the language of the joint stipulation, as well as an email exchange by the parties' respective counsel, evidences the compromise reached by the parties. Hofstra contends that, insofar as the Nassau County Legislature might pursue subpoenas from persons not subject to the January document subpoenas, such as casinos or other third-parties not acting for Hofstra, then the language reserving the Nassau County Legislature's ability to issue any other subpoenas would be operative. Hofstra asserts that it is clear that the Nassau County Legislature agreed to forego pursuing documents from other persons connected to Hofstra.
Lastly, Hofstra contends that it plainly has standing to challenge the February subpoenas, as the only basis provided by respondents for issuing the February subpoenas to the recipients is their relationship as counsel and consultants to Hofstra. Hofstra contends that the respondents substantially rely upon law that pre-dates the 2013 amendment of the CPLR. Hofstra explains that in 2013, CPLR 3103(a) was amended to allow any party or person "about whom" discovery is sought to move for a protective order. In any event, Hofstra further contends that it would have standing because, as the client, it has a proprietary interest in the materials held by the subpoenaed third parties and because Hofstra and the Nassau County Legislature are parties to this litigation about the annulled lease, which is the subject of the investigation.
Discussion
At the outset, this Court will address the issue of Hofstra's standing to move to quash the February subpoenas and for protective orders in motion sequence 004. Prior to 2013, courts routinely held that "[a] person other than one to whom a subpoena is directed has standing to move to quash the subpoena where he or she has a proprietary interest in the subject documents or where they involve privileged communications" (Hyatt v State of Ca. Franchise Tax Bd., 105 A.D.3d 186, 194-195 [2d Dept 2013]; see Matter of Oncor Communications v State of New York, 218 A.D.2d 60, 62-63 [1st Dept 1996]).
On July 31, 2013, CPLR 3103, entitled "Protective Orders," was amended to allow any party or person "about whom" discovery is sought to move for a protective order. The statute now provides:
(a) Prevention of abuse. The court may at any time on its own initiative, or on motion of any party or of any person from whom or about whom discovery is sought, make a protective order denying, limiting, conditioning or regulating the use of any disclosure device. Such order shall be designed to prevent unreasonable annoyance, expense, embarrassment, disadvantage, or other prejudice to any person or the courts(CPLR 3103[a] [emphasis added]).
In cases decided after July 31, 2013, courts have held that parties or persons about whom discovery is sought in subpoenas issued to third parties have standing to challenge those subpoenas, without requiring a showing by the movant that the information sought is proprietary or privileged (see e.g. M&T Bank Corp. v Moody's Invs. Servs., Inc., 191 A.D.3d 1288, 1290-1291 [4th Dept 2021]; Matter of Harris v Seneca Promotions, Inc., 149 A.D.3d 1508, 1510 [4th Dept 2017]; Safier v Wakefern Food Corp., 2023 NY Slip Op 034614[U] [Sup Ct, Westchester County 2023]; Tsunis v Gasparis LLP v Ring, 74 Misc.3d 1206 [A], 2022 NY Slip Op 50070[U] [Sup Ct, Suffolk County 2022]; Rubin v Sabharwal, 2020 NY Slip Op 30250[U], *3 [Sup Ct, New York County 2020]).
Here, it is undisputed Hofstra is an entity "about whom" discovery is sought. The respondents plainly state the purpose of the subpoenas is to investigate whether Hofstra has colluded with one of Sands' competitors for a casino license. The February subpoenas were issued to Petrillo Klien + Boxer LLP, the law firm representing Hofstra is this proceeding/action; Rivkin Radler LLP, which also represents Hofstra; McBride Consulting & Business Development Group, a former consultant to Hofstra; and Colliers Engineering & Design, a consultant to Hofstra, respectively. Under these circumstances, where the subpoenas at issue seek information about Hofstra, Hofstra has standing to move pursuant to CPLR 2304 and 3103 to quash the subpoenas and for protective orders.
Turning to the merits, the Court of Appeals has repeatedly stated that "[a]n application to quash a subpoena should be granted '[o]nly where the futility of the process to uncover anything legitimate is inevitable or obvious'... or where the information sought is 'utterly irrelevant to any proper inquiry'" (Matter of Kapon v Koch, 23 N.Y.3d 32, 38 [2014], quoting Anheuser-Busch, Inc. v Abrams, 71 N.Y.2d 327, 331-332 [1988]; see Beach v Shanley, 62 N.Y.2d 241, 247-248 [1984]; Goldin v Greenberg, 49 N.Y.2d 566, 572 [1980]). Here, the respondents assert that an investigation of alleged collusion between Hofstra and a competitor of Sands for a casino license is a "proper inquiry" because Nassau County's potential partnership with Sands involves Nassau County's interest in developing its property. The respondents further assert that the Nassau County Legislature has the authority to conduct this investigation and to issue subpoenas pursuant to the investigatory powers granted to the Nassau County Legislature by County Law § 209.
Counsel for the respondents falsely state that "[t]he County Legislature 'enjoys a presumption that [it] is acting in good faith and must show only that the materials sought bear a reasonable relation to the subject matter under investigation and to the public purpose to be achieved.' Anheuser-Busch, Inc, 71 N.Y.2d at 332" (NYSCEF 184 ¶ 37, 186 ¶ 10 [emphasis added]). This is a blatant misrepresentation of Anheuser-Busch, Inc. In actuality, Anheuser-Busch, Inc. states that "the Attorney-General enjoys a presumption that he is acting in good faith" (Anheuser-Busch, Inc. v Abrams, 71 N.Y.2d 327, 332 [emphasis added]).
To determine whether the Nassau County Legislature's investigation of alleged collusion between Hofstra and Hard Rock is a proper inquiry, this Court must determine whether the investigation is within the powers granted to the Nassau County Legislature by County Law § 209 (see generally Goldin v Greenberg, 49 N.Y.2d 566, 570-571 [1980]).
County Law § 209 provides:
§ 209. Investigations
The board of supervisors is empowered to conduct an investigation into any subject matter within its jurisdiction, including the conduct and performance of official duties of any officer or employee paid from county funds and the accounting for all money or property owned by or under the control of the county. The power to conduct investigations may be delegated to a committee of the board. The chairman of the board and any member of such committee may issue a subpoena requiring a person to attend before the board or such committee and be examined in reference to any matter within the scope of the investigation, and in a proper case to produce all books, records, papers and documents material or relevant to the investigation. A subpoena issued under this section shall be regulated by the civil practice law and rules. The chairman of the board and any member of such committee may administer the oath to any witness and adjournments may be taken from time to time.
Pursuant to County Law § 150-a, the powers granted to the Board of Supervisors may be exercised by the Nassau County Legislature.
There is very little caselaw on the scope of the investigatory powers granted to county legislatures by County Law § 209. This Court is aware of only two such cases. In Paterson v Niagara County Legislature, Comm. on Investigations of Legislature of County of Niagara (59 A.D.2d 1062 [4th Dept 1977]), the Appellate Division, Fourth Judicial Department held that an investigation into the alleged mishandling of funds by the office of the Niagara County Treasurer was within the scope of the investigative powers conferred upon the Niagara County Legislature by County Law § 209. In Nassau County Employee "L" v County of Nassau (345 F.Supp.2d 293 [ED NY 2004]), the United States District Court for the Eastern District of New York held that an investigation into the misconduct of a Nassau County deputy executive was within the scope of County Law § 209.
Other cases have mentioned subpoenas issued by county legislatures, without discussing the scope of County Law § 209. For example, in Isernio v U.S.I. Holdings Corp. (182 Misc.2d 121 [Sup Ct, New York County 1999]), the Supreme Court, New York County, mentioned that the Nassau County Legislature issued subpoenas to investigate the procurement of a contract between Nassau County and Benefit Plan Administrators, which was the third-party benefits administrator of the employee health benefits plan for Nassau County's 26,000 workers (id. at 123). In Matter of New England Petroleum Corp. v County of Suffolk (52 A.D.2d 926 [2d Dept 1976]), the Appellate Division, Second Judicial Department (hereinafter the Second Department), affirmed an order of the Supreme Court, Suffolk County, denying a motion to quash subpoenas to investigate the causes of electricity and natural gas rate increases. The Second Department explained that the subpoenas were issued in furtherance of a legislative inquiry and, in such a situation, "'[o]nly where the futility of the process to uncover anything legitimate is inevitable or obvious must there be a halt upon the threshold'" (id. at 926-927, quoting Matter of Edge Ho Holding Corp., 256 NY 374, 382 [1931]), and the Second Department further stated that it was not persuaded, inter alia, that the investigation would "be futile for any legislative purpose" (New England Petroleum Corp. v County of Suffolk, 52 A.D.2d at 927).
The New York Attorney General has opined on the scope of the investigatory powers granted by County Law § 209. In 1977 NY Op. (Inf.) Att'y Gen. 140, the Senior Assistant County Attorney of Rockland County requested the opinion of the Attorney General regarding whether, pursuant to County Law § 209, the Rockland County Legislature could investigate matters pertaining to the activities and participation in corporate affairs of its appointive director of the Catskill Regional Off-Track Betting Corporation, and whether the corporate activities of the Catskill Regional Off-Track Betting Corporation are subject to the investigative and subpoena powers of the County Legislature. The Attorney General Opinion noted that the Catskill Regional Off-Track Betting Corporation is a public corporation distinct and apart from the County of Rockland. Additionally, while a member of the board of directors of the Catskill Regional Off-Track Betting Corporation was appointed by Rockland County, that member of the board of directors was not paid from County funds. The Attorney General Opinion also noted that neither the money nor the property of the Catskill Regional Off-Track Betting Corporation was "under the control of Rockland County within purview of County Law § 209." Rather, ample provisions for the control of regional off-track betting corporations, including the power of removal of a director, was vested with the New York State Racing and Wagering Board. Additionally, the monetary transactions of a regional off-track betting corporation were also subject to audit by the State Comptroller. Based on the foregoing, the Attorney General Opinion concluded that "the Legislature of Rockland County has no [authority] to investigate matters pertaining to the activities and participation in corporate affairs of its appointive director or any other corporate activities of the Catskill Regional Off-Track Betting Corporation either with or without the exercise of subpoena power" (1977 NY Op. [Inf.] Att'y Gen. 140).
To summarize the above authorities, courts have upheld subpoenas issued by county legislatures to investigate the alleged misdeeds of county employees, the procurement of a contract for the administration of the county's employees' health benefits plan, and the causes of rate increases for electricity and natural gas within the subject county. In these scenarios, the subject counties' connections to the respective investigations were clear. The Attorney General opined, in contrast, that the Rockland County Legislature would not have the authority to investigate the County's appointive director of or the corporate activities of the Catskill Regional Off-Track Betting Corporation, noting that the appointive director was not paid from County funds, and neither the money nor property of the Catskill Regional Off-Track Betting Corporation was under the County's control.
Here, the Nassau County Legislature seeks to use its investigatory power to eliminate Hard Rock from the competition for a casino license. The investigatory powers granted by County Law § 209 do not extend this far.
The respondents argue that the Nassau County Legislature has the authority to investigate alleged collusion between Hofstra and Hard Rock because Nassau County has an interest in developing its property in partnership with Sands. This interest in developing its property is too speculative for the subject investigation to constitute a proper inquiry. As the respondents acknowledge, Hard Rock is just one of several of Sands' competitors for a casino license. The other casino companies submitting applications include Wynn Resorts, Caesars Entertainment, and Bally's. Therefore, even if Hard Rock were eliminated from the competition, Sands is not guaranteed to be awarded a casino license. Moreover, Sands currently has no leasehold interest in the land upon which the Nassau Coliseum sits (see NYCEF 166). The respondents assert that Nassau County and Sands plan to enter into a new lease, either if this Court's decision and order dated November 9, 2023, is reversed on appeal, or if the County enters into a new lease after conducting the public hearings and environmental review contemplated in that decision and order. However, even if the County properly conducts the public hearings and environmental review contemplated by this Court's decision and order dated November 9, 2023, any new lease would still need to be approved by a vote of the Nassau County Legislature, and if the Nassau County Legislature does not approve the new lease, then this investigation would be rendered moot.
It should be emphasized that Hofstra is not an applicant for a casino license. As such, the anti-collusion rules that apply to casino license applicants do not apply to Hofstra. Therefore, the respondents' contention that the subpoenas properly seek to discover whether Hofstra improperly colluded with Hard Rock is baseless. Additionally, the respondents have not provided any support for their contention that the Nassau County Legislature is authorized to investigate whether Hard Rock violated the anti-collusion rules, and that it may begin its investigation by issuing subpoenas to a participant in the collusion, i.e., Hofstra. Moreover, the Attorney General Opinion discussed supra suggests that County Law § 209 would not provide the Nassau County Legislature with the authority to conduct this investigation, as the New York State Gaming Facility Location Board is vested with the authority to conduct investigations (see Rac. Pari-Mut. Wag. & Breed Law § 1306; 1977 NY Op. [Inf.] Att'y Gen. 140). To the extent the respondents assert that the Nassau County Legislature is properly investigating whether the coordination between Hofstra and Hard Rock has violated any laws, including by seeking to reduce competition in the casino license application process, "[n]o agency of government may conduct an unlimited and general inquisition into the affairs of person within its jurisdiction solely on the prospect of possible violations of law being discovered, especially with respect to subpoenas duces tecum. There must be authority, relevancy, and some basis for inquisitorial action" (A'Hearn v Comm. on Unlawful Practice of Law, 23 N.Y.2d 916, 918 [1969]).
It should also be emphasized that the Nassau County Legislature is not an applicant for a casino license. To be sure, the interests of the Nassau County Legislature and Sands are intertwined. The respondents have zealously fought to uphold the lease entered into between Nassau County and Sands. Indeed, Nassau County is seemingly paying outside counsel, Sullivan & Cromwell LLP, a minimum of $1 million and a maximum of $2.5 million to represent the respondents in this litigation (NYSCEF 193 ¶ 23 n 5). The Nassau County Legislature now seeks to use its subpoena power to eliminate Hard Rock from the competition for a casino license. It is plain that the interests of the respondents and Sands stand and fall together. The competition for a casino license, however, is a battle to be fought by the casino companies; not by the Nassau County Legislature as a proxy of Sands.
Although the term of the contract between Nassau County and Sullivan & Cromwell LLP began on April 20, 2023, the contract wasn't filed with the Nassau County Clerk until November 15, 2023, and a Newsday article dated November 16, 2023, reported that, as of the date of that article, legislative approval of the contract was "in progress" (NYSCEF ¶ 23 n 5).
Conclusion
Based on the foregoing, it is hereby
ORDERED that Hofstra's motion pursuant to CPLR 2304 and 3103 to quash the subpoena ad testificatum dated January 16, 2024, issued by the Rules Committee of the respondent Nassau County Legislature to Dr. Susan Poser, and for a protective order (motion seq. 002) is GRANTED; and it is further, ORDERED that Hofstra's motion pursuant to CPLR 2304 and 3103 to quash four subpoenas duces tecum dated February 29, 2024, issued by the Rules Committee of the respondent Nassau County Legislature to Petrillo Klien + Boxer LLP, Rivkin Radler LLP, McBride Consulting & Business Development Group, and Colliers Engineering & Design, respectively, and for protective orders (motion seq. 004) is GRANTED.
The parties' remaining contentions have been considered and do no warrant discussion.
Any relief not specifically granted herein is DENIED.
This shall constitute the decision and order of this Court.