SUPREME COURT

STATE OF NEW YORK COUNTY OF ALBANY

DOUGLAS BECKER; BRIAN A. BOYD; GEORGE HEIDCAMP

PAUL M. HETLAND; FLORENCE D. JOHNSON; PETER
KRUSZYNSKI; KIMBERLY PETRAMALE; HARRY B.
REEDE; WAYNE E. SCHLIFKE; SETH TURNER;
NEW YORK STATE UNITED TEACHERS, by its president,
RICHARD C. IANNUZZI; NEW YORK STATE SCHOOL BOARDS
ASSOCIATION, by its president, WAYNE SCHLIFKE;
SCHOOL ADMINISTRATORS ASSOCIATION OF NEWYORK STATE,
by its President, PETER KRUSZYNSKI; and the NEW YORK
STATE COUNCIL OF SCHOOL SUPERINTENDENTS,

Plaintiffs,
-Against-
Index No. 10491-09
HONORABLE DAVID A. PATERSON, as Governor of
the State of New York; THE NEW YORK STATE
DIVISION OF THE BUDGET; ROBERT L. MEGNA,
As Budget Director for the New York State Division
of Budget; THE NEW YORK STATE OFFICE OF THE
STATE COMPTROLLER; and THOMAS P. DiNAPOLI,
as Comptroller of the State of New York
Defendants.
_______________________________________________________________________

DEFENDANTS’ MEMORANDUM OF LAW IN OPPOSITION

TO PLAINTIFFS’ MOTION FOR A PRELIMINARY INJUNCTION

ANDREW M. CUOMO
Attorney General of the State of New York
Attorney for Defendants
The Capitol
Albany, New York

Robert Siegfried
Stephen M. Kerwin
Kelly L. Munkwitz
Justin C. Levin
Assistant Attorneys General
Of Counsel
 TABLE OF CONTENTS

PRELIMINARY STATEMENT ........................................................................................ 1

STATEMENT OF FACTS ................................................................................................. 3

POINT I: PLAINTIFFS ARE NOT LIKELY TO PREVAIL ON THE MERITS. ......... 15

A. The Executive Has Cash Management Authority.................................................... 17

1. The Authority to Manage the State’s Cash is Vested in the Executive Branch... 17

2. Matter of County of Oneida v. Berle is Not Controlling . .................................. 21

3. The Court Should Exercise Restraint in its Review of the Executive’s Operational
Determination in this Time of Fiscal Crisis...................................................................... 24

B. The Temporary Reduction of Local Assistance Payments as Part of a Cash

Management Strategy to Avoid the State’s Insolvency During a Historic Fiscal Crisis
Does Not Violate the Education Article of the Constitution. ........................................... 25

1. The Plaintiffs Fail To State A Cause of Action Under The Education Article. 25

2. This Matter Is Non-Justiciable.......................................................................... 29

C. The Plaintiffs Fail to State a Claim for Violation of Section 3609-a of the
Education Law. ................................................................................................................. 30

D. Mandamus Does Not Lie. ..................................................................................... 32

E.. Plaintiffs do Not Have Standing to Maintain This Action.................................... 33

1. The plaintiff organizations cannot establish standing....................................... 33

2. The individual plaintiffs cannot establish standing. ......................................... 36

a. No taxpayer standing .................................................................................... 37

b. No standing as school board members.......................................................... 39

POINT II: PLAINTIFFS FAIL TO SHOW IRREPARABLE HARM ........................... 40

POINT III: THE BALANCE OF THE EQUITIES FAVORS THE DEFEFNDANTS .. 42

CONCLUSION................................................................................................................. 43
 PRELIMINARY STATEMENT

The State of New York is in the midst of the most serious and sustained economic

downturn since the Great Depression. Although the Governor has taken a series of actions to

manage the fiscal affairs of the State, and although the Legislature has enacted part of the

Governor’s proposed Deficit Reduction Plan, the State is facing what can only be termed a cash

crisis. The issue before the Court centers on one step the Governor has taken to ensure the

continued provision of government services and avoid the chaos and widespread harm that will

inevitably ensue if the cash balance falls to zero. Prior to December 15, 2009, Governor David

A. Paterson instructed Robert L. Megna, Director of the New York State Division of the Budget,

to exercise his lawful authority to manage State expenditures by temporarily delaying his

approval of a small percentage of certain local assistance payments payable in December 2009.

Plaintiffs – a school boards association, a teachers’ union, an association of school

superintendents, and a number of individual taxpayers, teachers, school administrators and

school board members- commenced this action on December 16, 2009 with service of a

Summons and Complaint. The Complaint alleges four causes of action: (1) the Director’s action

violates the constitutional separation of powers; (2) temporary delay of partial payment in State

aid results in a violation of the constitutional requirement that the State provide a free sound

basic education; (3) the temporary delay of payment results in a violation of Education Law

section 3609-a (1)(a)(4) and section 3609-e (2)(f); and (4) the Director’s actions were ultra vires.

Simultaneously, the plaintiffs sought an Order to Show Cause seeking a preliminary injunction

which would require the defendants to pay to the school districts the balance of the December 15

payment. The requested Order was signed by the Honorable Michael C. Lynch on December 16,

2009 and it requires the defendants to show cause why the requested relief should not be granted.
 Plaintiffs’ application is based on conclusory and unsupported allegations of harm, and

completely disregards the impact such an injunction would have on the State’s cash balance and

the repercussions to other individuals and entities who rely on State funding.

Among the payments in question are funds appropriated to school districts for School Aid

and the STAR program by the enacted budget for the 2009-10 fiscal year. School districts have

received 90 percent ($1.314 billion) of the total amount of School Aid that they expected to

receive in December, and it is expected that they will be paid 81 percent ($1.859 billion) of the

total STAR payment to be made later this month. The State has temporarily reserved $146

million of the $1.460 billion anticipated December payment and expects to reserve $436 million

of the $2.295 billion STAR payment for the sole purpose of making sure the State does not run

out of cash. Governor Paterson and Budget Director Megna have publicly assured that these are

temporary measures and the reserved amounts will be paid out to districts as soon as the State

has received sufficient revenues, perhaps as early as January 2010, and certainly within the

current fiscal year.

Plaintiffs are not likely to prevail on the merits of this action. This case must be resolved

in defendants’ favor because (1) the temporary, partial payments at issue plainly were

encompassed by the Executive’s authority to manage the State’s cash; (2) Matter of County of

Oneida v. Berle, 49 N.Y.2d 515 (1980) is easily distinguishable; (3) Plaintiffs’ claim that

defendants’ actions violated the New York Constitution’s Education Article lacks merit; (5)

plaintiffs’ Education Law claim must fail; and (6) mandamus does not lie. Moreover, the Court

should decline to consider plaintiffs’ arguments at all because the subject matter of this litigation

is typically a non-justiciable issue and, in any event, plaintiffs’ lack standing to bring this action.

Plaintiffs also have failed to demonstrate by non-speculative factual assertions that they would

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suffer irreparable harm when the preliminary injunction is denied. Finally, a balance of the

equities favors the defendants because immediate disbursement of the funds at issue would

unnecessarily and unjustifiably risk the State’s solvency. In sum, for the reasons that follow,

plaintiffs cannot meet the heightened burden necessary to justify the imposition of the

preliminary injunction that they seek.

STATEMENT OF FACTS

The State of New York is in the midst of a severe economic downturn, which has resulted

in an unprecedented revenue crisis. Earlier this month, the Governor and his Budget Director

determined that the situation had developed into a cash crisis and there is a significant risk that

the State would end December with a negative cash position. If the State actually were to run

out of cash, the consequences would be chaotic and potentially devastating. Affidavit of

Director Robert Megna (hereinafter Megna Affid.), ¶ 4.

The Division of the Budget’s authority to execute the enacted budget includes the ability

to use various cash management tools to avoid running out of cash, but the severity of the fiscal

crisis has made many of those tools unavailable. However, one tool that has remained available

is the Certificate of Approval, which by law and practice is a condition of every payment made

under every appropriation. The Division used the certificate process to temporarily delay

payment of a portion of certain local assistance payments so that a $750 million cash cushion

could be reserved. The delayed amounts, including the school aid payments at issue in this

litigation, have not been impounded and, as the Governor has publicly stated, will be paid as

soon as sufficient revenues are received, potentially in early to mid-January. In any event, the

school aid will be paid in the current fiscal year. Megna Affid. ¶ 5.

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 The Budget Process and Certification Authority

The Budget Division works in conjunction with the Governor in preparing the Executive

Budget submitted annually to the Legislature, pursuant to Article VII, § 2 of the New York

Constitution. Megna Affid. ¶ 6.

Pursuant to State Finance Law § 22, the Executive Budget must include a series of plans,

collectively known as the Financial Plan, which essentially describe the State’s resources and

spending requirements. Once the budget is enacted, the Division revises the Financial Plan, as

required by State Finance Law § 23, to reflect the relevant provisions of the enacted budget and

provide a cash flow analysis of the receipts and disbursements projected for each month of the

State’s fiscal year. Megna Affid. ¶¶ 7-8.

Throughout the fiscal year, the Division tracks and analyzes the actual flow of revenues

and expenditures, compares those numbers to its earlier projections, revises its forecasts

regarding the national and state economy and issues quarterly updates to the Financial Plan,

required under State Finance Law § 24. Megna Affid. ¶ 9.

In addition, the Division conducts the day-to-day operations of approving allocations

from appropriations Megna Affid. ¶ 10. An integral component of the budget execution function

is the Division’s monitoring and management of the cash balances in the State funds, particularly

the General Fund, and using prudent fiscal practices to ensure that enough cash is available on a

particular day to cover all of the disbursements which are expected to be made on that day.

Megna Affid. ¶ 11. In addition, the Division continuously considers future projected

disbursements and expected receipts and proactively uses available cash management

mechanisms to meet future projected needs for cash. Megna Affid. ¶ 12.

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 The General Fund is the major operating fund of the State. It receives all State income

not earmarked for a particular program or activity and not specified by law to be deposited in

other funds. State income consists of moneys deposited to the credit of the General Fund during

the fiscal year from current revenues and transfers. Megna Affid. ¶ 13. The balance in the

General Fund changes every day. The Division’s cash management activities are extremely

complex in light of the thousands of transactions conducted each year and given that such

activities rely on projections of future inflows and outflows that are constantly in flux. Megna

Affid. ¶ 14.

A deficit exists if the General Fund reflects an excess of disbursements over receipts at

the end of a fiscal year. However, a shortage of cash in the General Fund can occur at any time,

regardless of whether the budget is in balance or not, depending on the timing of receipts and

disbursements. In sum, monitoring and managing cash on a daily basis is distinct from the

balancing the budget. Megna Affid. ¶ 15.

Even in good economic times, active supervision is required to ensure that the General

Fund is not exhausted because numerous disbursements are paid simultaneously, before revenues

received on a periodic basis are credited. More vigilance is required during an economic

downturn, when receipts may prove to be less than projected, to ensure that the State does not

risk running of cash and become unable to make payments. Megna Affid. ¶ 16.

The Budget Director continuously monitors the State’s fiscal and cash position, through a

variety of reports he receives daily basis from his own staff and from the State Comptroller.

Megna Affid. ¶ 17. The Director is assisted in these tasks by a staff of Chief Budget Examiners

each of whom is responsible for one or more different subject areas, and for administering

expenditures and revenues within those areas. Megna Affid. ¶ 18.

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 The Division has a number of tools that allow it to manage the cash balance in the

General Fund. One of the most important of these is the use of Certificates of Approval or

Certificates of Allocation. They are issued by the Budget Director to authorize allocations from

funds appropriated for specified purposes, activities, or objects. The certification process allows

the Director of the Budget to manage cash and control expenditures in a manner consistent with

his or her legal authority and the State’s financial position. In short, the certifications are a

“control device” for spending of appropriated funds. Megna Affid. ¶¶ 19-21; Affidavit of Joan

Sullivan (hereinafter “Sullivan Aff.”), ¶ 6.

Certificates of Approval were first used in 1947 in regard to capital spending. Megna

Affid. ¶ 22. In 1995, language was added to the Executive Budget to make absolutely clear the

Executive’s authority to use Certificates of Approval in controlling State expenditures. That

language made clear that payment of all appropriations are conditioned upon issuance of a

Certificate of Approval, and has been enacted by the Legislature in each appropriation bill

thereafter. Accordingly, all appropriations in the budget are subject to one particular condition:

that funds not be expended until the Director or his or her designee has issued a Certificate of

Approval. Megna Affid. ¶¶ 22-24; Sullivan Affid., ¶ 9.

As a result, funds are expended pursuant to appropriations in the enacted budget in the

following manner. The relevant Chief or Principal Budget Examiner signs a certificate as the

Director’s designee, after he or she determines that the funds should be released, because the

proposed use of funds is for an appropriate purpose and cash is available to make such payment.

Copies of all Certificates are sent to the State Comptroller and to the chairpersons of the two

legislative fiscal committees. The recipient of the funds must submit a voucher to the

Comptroller for payment. Sullivan Affid. ¶ 11 and Exhibit A. If the voucher is satisfactory and

6
the Comptroller has received the Certificate of Approval, the Comptroller issues payment for a

sum up to the amount of the allocation. Sullivan Affid. ¶¶ 6, 12. This certification process

provides the Director with an important cash management tool which can be used to administer

the ebbs and flows of spending and – particularly in times of fiscal crisis – to ensure that the

State has the funds available to make payments. Megna Affid. ¶¶ 25- 26; Sullivan Affid. ¶ 14.

The Revenue Crisis

At the end of the first quarter of 2008 the nation’s financial system was beset by crisis

and New York was its epicenter. Megna Affid. ¶ 27. These events had, and continue to have, a

profound impact on the State’s revenue base. In recent years the New York City financial district

provided at least 20 percent of New York’s tax revenue but the enterprises from which such

taxes are paid were hardest hit by the crisis. Revenues from that sector were severely constricted

and the State’s overall revenues declined precipitously through the first quarter of 2009. This

caused the Governor to direct various administrative actions, and to propose a Deficit Reduction

Plan to the Legislature. Megna Affid. ¶¶ 28-29.

The FY 2009-10 enacted budget, adopted April 7, 2009, provided for spending of

approximately $132 billion, of which $55 billion was from the General Fund. The revenue

assumptions that underlay the enacted budget were significantly reduced in comparison with

prior years, although mild economic recovery was assumed to occur in the fourth quarter of the

calendar year. That recovery has not occurred, and the State’s revenues have continued to

decline at unprecedented rates. This decline has impacted both the State’s current cash position

and its structural budget imbalance in future years. Megna Affid. ¶¶ 30- 33.

Based on the deficit estimates of the Division and the Comptroller and other information

available to the Division of the Budget, the Budget Director determined that there was a

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significant risk that the State would end December with a negative cash position, something that

has never occurred before in the State of New York, at least not in the recent history of modern

budgeting. Megna Affid. ¶ 36; Sullivan Affid. ¶ 16.

To address this crisis, Governor Paterson ordered state agencies to reduce expenditures,

and he proposed a Deficit Reduction Plan (“DRP”) consisting of a number of legislative and

administrative actions that would have reduced projected cash deficit in the current fiscal year,

with recurring savings in later years. Megna Affid. ¶ 37. On December 1, 2009, the Legislature

passed some of the legislative components of the DRP but its action left an estimated deficit of

$500 million. 1 Moreover, the State’s cash position and ability to meet expenditures was worse

than the Fiscal Year deficit alone indicated. In addition, the Division’s ability to implement the

DRP and access its fiscal benefits was constrained by the delay in its passage. Megna Affid. ¶¶

37-38.

The State’s cash weakness significantly worsened in December 2009. Following the

Legislature’s partial enactment of the proposed DRP there remained a significant risk the State

would run out of sufficient available funds necessary to make its December payments. Megna

Affid. ¶ 39.

Extraordinary Cash Management Tools

The Governor and Director of the Budget have extraordinary measures that potentially

could be used in the case of a serious cash shortage: (1) relying on short-term use, to the extent

permissible, of funds in the “Short Term Investment Pool” (STIP), which includes the State’s

“rainy day funds,” and other available funds of the State; and (2) issuing Tax and Revenue

1
Plaintiffs mischaracterize the Governor’s actions. See Plaintiffs’ Memorandum of Law, p. 6. The Governor
requested from the Legislature a blanket 10 percent cut of all appropriations, however that bill never made it out of
committee. Here, the Governor has not made any cuts. Rather, he is legally delaying payments to avoid
exacerbating the current unprecedented fiscal crisis.

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Anticipation Notes (TRANs). The STIP, however, is severely depleted, and use of TRANs

would be exceedingly unwise, and may be impermissible. As a result, I have been left with no

option but to delay expenditures. The General Fund has made use of the STIP funds throughout

the course of FY 2009-10. Indeed, on 60 separate days from April 1 through November 2009,

the State was able to make payments from the General Fund only because the General Fund

relied on STIP funds. The cash reserves that the State presently has at its disposal include all

available STIP funds, and because the General Fund has borrowed significant amounts from

STIP this year, STIP has been largely depleted. In addition the use of TRANS did not present a

viable path towards extricating the State from its current cash crisis. One type of TRANs, known

as “deficit TRANs,” must be repaid in the following fiscal year. Megna Affid. ¶¶ 40- 48. The

State has taken other extraordinary measures to improve its cash flow position and the only

further means of addressing the current cash crisis is to reduce outflows of funds. Megna Affid.

¶ 49.

The Cash Crisis

In early December the Division projected that the closing balance in the General Fund at

the end of December would be negative by more than $1.4 billion on if the December 15 School

Aid payment was made in full. To make that payment in full, the General Fund would need to

rely on STIP funds. After drawing on STIP funds, the Division projected that the balance

remaining and available for future cash management borrowing on December 11 would be only

$81 million. At the end of December, only $169 million would be available to the General Fund,

consisting entirely of funds remaining in the STIP. In sum, based on projections, on December

11 the State would have been operating with a margin of $81 million, which is equal to

approximately 0.06 percent of projected All Governmental Funds spending for FY 2009-10, and

9
that margin consists entirely of the vestiges of funds that are available for borrowing from the

STIP. Moreover, the State’s cash position fluctuates on a daily basis, depending on actual

amounts expended and revenues received. Thus, it is impossible to project with certainty how

much money will be available to the State on any particular day. In light of these projections and

calculations, there was a significant risk that the State would enter a negative cash position

during the course of December and absent measures to reduce the outflow of funds, the State

would run out of money during the course of the month. Megna Affid. ¶¶ 50-53.

The consequence of the State running out of cash would be dire: there would have been a

very real risk that expenditures planned for the immediate future would be made in a chaotic and

random fashion or not at all; obligations would go unmet, subjecting the State to legal liability or

a downgrading of its credit rating; in the case of school and local aid, some localities and districts

would receive payment in full while others might get nothing. In light of these circumstances and

as essential to manage the State’s cash flow, the Governor directed that the Budget Director

restrict issuance of certificates where necessary, and impose the limited and partial delay of

payments to prevent this eventuality. Megna Affid. ¶¶ 54- 55.

Delayed Payments At Issue

December is a month during which significant General Fund payments are made. To

ensure that the State would have sufficient funds to make payments as they came due, the Budget

Director took several actions to reserve a $750 million cash cushion which he projected would be

sufficient to remove the danger of the State running out of money, and to avoid making

payments on a haphazard and unpredictable basis. Megna Affid. ¶¶ 56- 57.

One action the Director took was to delay payment of 10 percent of school aid provided

for under Education Law § 3609-a. That provision states that school districts will be “eligible

10
for payment” of School Aid by specified dates That schedule was enacted by section 26 of

Chapter 260 of the Laws of 1993, pursuant to a proposal in the Executive Budget. The

Governor’s memorandum submitted with the bill does not state that its purpose was to establish a

mandatory set of dates enforceable by court action; indeed, § 3609-a states only that districts be

“eligible for payment” on that date, not that they be paid on that date – a requirement that would

have been simple for the Governor and Legislature to set forth. Megna Affid. ¶¶ 58- 59.

Notwithstanding the State’s extraordinary cash crisis, 90 percent of payments scheduled

to be made to school districts for School Aid pursuant to Education Law § 3906-a was approved

as was 90 percent of two other School Aid payments pursuant to Education Law §§ 3906-b and

3906-f. Megna Affid. ¶ 60. The Comptroller paid those amounts on or about December 15,

2009. Sullivan Affid. ¶ 15. Similarly, 90 percent of the payments set to be paid for the Aid to

Municipalities (AIM) program was approved, delaying payment of 10 percent thereof. Megna

Affid. ¶¶ 60 -61.

    Three other sizeable payments are scheduled for later in December and early January.

The Governor announced that up to 19 percent of these three later payments might be delayed,

depending on the condition of State finances when such payments are anticipated. Megna Affid.

¶¶ 62-63.

The payments targeted for delay were selected in order to minimize disruption, and

ensure orderly cash management. The reserved payments amount, at most, to approximately 1.2

percent of total school budgets. Megna Affid. ¶¶ 64-65.

The $750 million cushion that is expected to be achieved through the delayed payments

will be not enough to bring the projected General Fund balance on December 31, 2009 –

negative $899 million – to zero or above. It will, however, result in a margin of funds available

11
for use of the STIP. The Governor’s actions are a responsible administration of the State’s

finances during this difficult and volatile period and avoid the chaos that would result from the

General Fund’s exhaustion of the funds available for temporary use. Megna Affid. ¶ 68.

Payment of the Delayed School Aid Payments

The School Aid payment amounts that were delayed will be paid as soon as the Director

determines that such payment will not put the State at risk of not fulfilling other obligations. If

receipts from estimated taxes due in January are sufficient, the payments most likely will be paid

in early to mid-January. Ultimately, however, because there are various other payments in early

2010 that can be delayed further, the school aid will be paid in the current fiscal year. Megna

Affid. ¶ 69.

ARGUMENT

"The party seeking a preliminary injunction must demonstrate a probability of success on

the merits, danger of irreparable injury in the absence of an injunction, and a balance of equities

in its favor." Nobu Next Door, LLC v Fine Arts Hous., Inc., 4 N.Y.3d 839, 840 (2005). The

purpose of a preliminary injunction is to preserve the status quo and to prevent the dissipation of

property, which might make a judgment ineffectual. Rattner & Assocs. v. Sears, Roebuck & Co.,

294 A.D.2d 346 (2d Dept. 2002). "The determination to grant or deny a preliminary injunction

rests in the sound discretion of the Supreme Court." Coinmach Corp. v Alley Pond Owners

Corp., 25 A.D.3d 642 (2d Dept. 2006).

Before preliminary injunctive relief may issue, an applicant must show that it has:

a. a strong likelihood of success on the merits (i.e., a clear legal right to the relief
sought);

b. that the applicant will be irreparably injured if the injunctive relief is not granted;
and

12
 c. that the equities balance in its favor.

Doe v. Axelrod, 73 N.Y.2d 749, 750 (1988); Armitage v. Carey, 49 A.D.2d 496, 498 (3d

Dept. 1973); Welcher, 222 A.D.2d at 1002; McCall v. State, 215 A.D.2d 1, 5-6 (3d Dept. 1995).

A preliminary injunction is drastic relief and should not be lightly granted. See Elkund v.

Pinkey, 31 A.D.3d 908, 910 (3d Dept. 2006). The drastic nature of the relief sought is

particularly keen here, where the relief is mandamus of the Governor. Injunctions are intended

to preserve the status quo, pendente lite. CPLR § 6301. However, that is not what plaintiffs

seek. As set forth below, plaintiffs cannot meet the standards required for a preliminary

injunction to issue. If the relief is granted, the result will be deleterious to the provision of

government services and the administration of State government. On the other hand, if the

preliminary injunction is denied, the only harm, if any, is a temporary delay in funding in the

context of the State’s current cash crises.

Plaintiffs= Bear A Heightened Burden of Proof.

The relief sought after preliminary injunction here, directing payment of the balance of

the State Aid eligible for payment in December 2009, would grant plaintiffs all the relief to

which they would ultimately be entitled if they were successful in this lawsuit. While a party

seeking a prohibitory injunction generally bears a heavy burden of proof, the plaintiffs in this

case must carry an even heavier burden because the injunction they seek mandates affirmative

conduct: the immediate release of education funding allegedly illegally impounded by the

defendants. The purpose of a preliminary injunction is to maintain Athe status quo pending a full

hearing on the merits, rather than to determine the ultimate rights of the parties and mandate

corrective action.@ See Jamie B. v. Hernandez, 274 A.D.2d 335, 336 (1st Dept 2000); see also

Uniformed Firefighters Ass=n v. City of New York, 79 N.Y.2d 236, 239 (1992). The preliminary

13
relief sought by the plaintiffs would upset, rather than maintain the status quo by awarding the

plaintiffs a portion of the ultimate relief they seek, namely, an order requiring the defendants to

immediately release the allegedly illegally-impounded education funding as required by the

Education Law. Order to Show Cause signed by the Hon. Michael C. Lynch and dated

December 16, 2009, page 2; Verified Complaint, page 15, # 3. See Morgan v. New York City

Racing Ass=n, 72 A.D.2d 740, 741 (2d Dept 1979) (AAs to granting a preliminary injunction

directing the respondents to permit petitioner's horse to race pending further litigation, we note

that the court is loathe to grant such an injunction, whereby the petitioner would receive his

ultimate relief sought… ”).

Where, as here, the requested preliminary relief upsets the status quo and awards the

ultimate relief sought, the moving party bears the heightened burden of establishing that

Aextraordinary circumstances@ warrant the relief. See Rosa Hair Stylists, Inc. v. Jaber Food

Corp., 218 A.D.2d 793, 794 (2d Dept. 1995). Thus, in Village of Westhampton Beach v.

Cayea, 38 A.D.3d 760 (2d Dept. 2007) the Second Department affirmed the trial court=s denial of

a preliminary injunction which would have required the defendant to remove improvements he

made to the premises and to place the remainder of the premises on pilings.

Mandatory injunctive relief should not be granted pendente lite without a showing
of extraordinary circumstances where the status quo would be disturbed and the
plaintiff would be granted the ultimate relief in the action (see St. Paul Fire &
Mar. Ins. Co. v York Claims Serv., 308 AD2d 347, 349, 765 NYS2d 573 [2003];
Rosa Hair Stylists v Jaber Food Corp., 218 AD2d 793, 794, 631 NYS2d 167
[1995]). Directing the defendants to attempt compliance with the Village Code
before such a determination is made could cause the defendants to do unnecessary
or inadequate work which later would have to be redone, and would deprive the
plaintiff of an incentive to prosecute this action to its conclusion (see Town of
Brookhaven v Pesinkowski, 288 AD2d 371, 372, 733 NYS2d 475 [2001]; Town of
Esopus v Fausto Simoes & Assoc., 145 AD2d 840, 842, 535 NYS2d 827[1988]).
Village of Westhampton Beach , 38 A.D.3d 760, 762.

14
 Egan v. New York Care Plus Ins. Co., 266 A.D.2d 600 (3d Dept. 1999) illustrates the

extraordinary circumstances needed to warrant the issuance of a preliminary injunction where the

interim relief requested constituted the ultimate relief sought in the action. In Egan, plaintiff

sought from defendants, who insured plaintiff, preapproval of intravenous antibiotic therapy.

Defendant denied the preapproval request and eventually stopped making payments altogether.

The court ruled that the plaintiff demonstrated extraordinary circumstances in that he was unable

to personally pay for the therapy prescribed by his physician and that he would suffer dire

physical consequences if the therapy was discontinued. 266 A.D.2d 601.

Plaintiffs in this action have clearly failed to meet the rigorous standard to obtain a

mandatory preliminary injunction. Simply stated, if this Court were to order the defendants to

release to the plaintiffs the funds withheld as pendente lite relief, recovery of such funds would

be complicated should the plaintiffs fail to obtain the ultimate relief they seek. On the other

hand, by denying the preliminary injunction, the funds, when they became available, would

remain in the hands of the defendants and would be available for disbursement to the plaintiffs

should they ultimately prevail in this litigation.

POINT I

PLAINTIFFS ARE NOT LIKELY TO PREVAIL ON THE MERITS.

AThe requirement of showing a likelihood of success . . . should be seen as a protection

against the exercise of the court's formidable equity power in cases where the moving party's

position, no matter how emotionally compelling, is without legal foundation.@ See Tucker v.

Toia, 54 A.D.2d 322, 326 (4th Dept. 1976). This admonition is especially apt here, where the

plaintiffs seek preliminarily what amounts to the ultimate relief sought by this action.

15
Plaintiffs fail to meet their burden of demonstrating a strong likelihood of success on the merits

of this action.

As an initial matter, plaintiffs cannot succeed on the merits because they lack standing to

maintain this action. The gravaman of plaintiffs’ complaint is that the payments at issue had to

be paid by December 15, 2009. This is not what Education Law §3609-a mandates. Moreover,

in addressing their obligation to demonstrate a likelihood of success on the merits, the plaintiffs

maintain that the Governor is exercising legislative, not executive power, thereby

unconstitutionally usurping the Legislature=s power. Memorandum of Law In Support of

Plaintiffs= Motion For Preliminary Injunction (hereinafter “Plaintiffs= Memorandum of Law”),

page 13. Plaintiffs further maintain that the Governor is prohibited by the Constitution and

decisional law from withholding appropriations approved by the Legislature and by him. Id.

The decisional law cited by the plaintiffs is Oneida v. Berle, 49 N.Y.2d 515 (1980) in which the

Court of Appeals held as unconstitutional the Governor=s impoundment of $7 million in funds

appropriated by the Legislature.

Oneida v. Berle, does not apply to the defendants’ actions. The Governor has not

impounded funds. Rather, he has taken prudent actions in light of the State’s precarious cash

position and has exercised his authority and fiduciary responsibility with the Director of the

Division of Budget to manage the cash available to continue government services. Plaintiffs will

receive the payments currently reserved potentially as early as January 2010 and in any event,

prior to the close of the fiscal year. See infra; Megna Aff. ¶ 68.

The unlikelihood of plaintiffs prevailing is further supported by their failure to

demonstrate that the defendants have violated the Education Article of the New York

Constitution. See Point I(B), infra.

16
 A. The Executive Has Cash Management Authority.

1. The Authority to Manage the State’s Cash is Vested in the Executive Branch.

The arguments advanced by plaintiffs in this action rest on a fundamental

mischaracterization or misunderstanding of the circumstances before the Court. Essentially,

plaintiffs contend that “the Governor is exercising legislative power, not executive power, and he

is thus illegally usurping the Legislature’s constitutional powers.” Plaintiffs’ Memorandum of

Law, at 13. In short, plaintiffs are wrong. The Governor and Budget Director have not taken

any legislative action, but rather, have properly exercised Executive authority. The Governor has

acted prudently to preserve the State’s fiscal solvency pursuant to the executive branch’s

statutory and inherent authority to manage the State’s cash throughout the fiscal year. Managing

the day-to-day operations of the budget is a quintessential Executive function.

The appropriation bill at issue contains a Certification Provision, which states, in relevant

part: “No moneys appropriated by this chapter shall be available for payment until a certificate

of approval has been issued by the director of the budget.” L. 2009, ch. 50, § 1(g). The purpose

and effect of this certification process is to allow the Budget Director to manage cash and control

expenditures in a manner consistent with his or her legal authority and the State’s financial

position. Megna Affid., ¶ 21. Thus, the Certification Provision makes clear the Executive’s

authority to manage available, dwindling cash such that all appropriations in an enacted budget

bill could be paid in a manner necessary to ensure the State’s fiscal solvency.

In addition, the Budget Director possesses a duty to ensure that appropriated funds are

distributed in a manner consistent with enacted appropriations and the State’s cash management

position. Executive Law § 180. In particular, the Budget Director must assist the Governor with

respect to the formulation of the budget and the correlating and revising of estimates and

17
requests for appropriations throughout the fiscal year. Id. Similarly, the Department of Budget

is required to monitor the State’s cash flow in order to ensure that the State maintains sufficient

cash flow to remain solvent. State Finance Law § 23. It has also been the accepted, long-time

custom, habit, and practice of the Department of Budget to manage the budget and, necessarily,

the State’s cash flow to preserve the State’s fiscal vitality. Megna Affid., ¶¶ 8-26.

Manifestly, the constitutional principle of separation of powers “requires that the

Legislature make the critical policy decisions, while the executive branch’s responsibility is to

implement those policies.” Bourquin v. Cuomo, 85 N.Y.2d 781, 784 (1995). However, “[t]he

executive power of the State, vested in the Governor, is broad.” Rapp v. Carey, 44 N.Y.2d 157,

162 (1978). Indeed, “the executive has the power to enforce legislation and is accorded great

flexibility in determining the methods of enforcement.” Id. at 163; see also Bourquin, 85 N.Y.2d

at 785.

Although it is the Legislature’s prerogative to enact appropriation bills, it is indisputable

that spending and execution of those appropriation bills is a function of the Governor. The

executive branch is the organ of government charged with the responsibility of having detailed

and contemporaneous knowledge regarding spending decisions. Executive Law § 180; State

Finance Law § 23; Matter of Foster v. Hurd, 20 A.D.2d 847, 848 (3d Dept. 1964) (“The duty of

the Director of the Budget is to help keep in balance the financial resources and financial

commitments of the State”), lv. denied 14 N.Y.2d 488 (1964); Interstate Sanitation Commn. v.

Cuomo, 140 Misc.2d 252 (Sup. Ct. Albany County, 1988) (upholding the Governor’s authority

to temporarily delay payment of a validly enacted appropriation); Megna Affid., ¶¶ 8-26; see

N.Y. Const. art. IV, § 3 (directing that the Governor “shall take care that the laws are faithfully

executed”). Because it is the function of the executive branch to allocate funds for payment

18
consistent with appropriation authority, the Governor, as head of the executive branch,

necessarily has authority to make cash payments in a fiscally responsible manner so long as he or

she does not usurp the Legislature’s function.

Here, no argument exists that the Governor and Budget Director usurped the

Legislature’s function because the temporary partial payment did not delete or destroy the

validity, legality, or effectiveness of the underlying appropriation which authorized the

expenditure. See Interstate Sanitation Commn., 140 Misc.2d 252. Defendants’ action also did

not indicate a disapproval of the appropriation or interfere with the policy considerations

supporting the appropriation. Instead, the Governor and Budget Director simply determined that

the State’s cash management situation necessitated a temporary delay of payment of a portion of

the appropriation. The entire appropriation, as approved by the Legislature, remains in effect.

See Megna Affid., ¶ 5.

Despite the functional separation of the three branches of government, the Court of

Appeals “has always understood that the duties and powers of the legislative and executive

branches cannot be neatly divided into isolated pockets.” Bourquin, 85 N.Y.2d at 784, citing

Clark v. Cuomo, 66 N.Y.2d 185 (1985). The Court of Appeals has recognized that “some

overlap between the three separate branches does not violate the constitutional principle of

separation of powers.” Clark, 66 N.Y.2d at 189.

The Court of Appeals has a “long-standing and steadfast refusal to construe the

separation of powers doctrine in a vacuum, instead [it views] the doctrine from a commonsense

perspective.” Bourquin, 85 N.Y.2d at 785. As explained by Chief Judge Cardozo, “‘[t]he

exigencies of government have made it necessary to relax a merely doctrinaire adherence to a

principle so flexible and practical, so largely a matter of sensible approximation, as that of the

19
separation of powers.’” Id., quoting Matter of Richardson, 247 N.Y. 401, 410 (1928); see also

Clark, 66 N.Y.2d at 189. The Court of Appeals has also concluded that in “extraordinary and

emergency circumstances” policy matters that have been committed to one branch of

government may be considered by a coordinate branch of government. Matter of New York

State Inspection, Sec. & Law Enforcement Empls., Dist. Council 82, AFSCME, AFL-CIO v.

Cuomo, 64 N.Y.2d 233, 240 (1984).

The Court of Appeals has stated:

There is flexibility in the Constitution, as there must be, because

estimates of expenditures will never be fulfilled exactly and
estimates of revenues will even less likely be fulfilled exactly.
And this lack of capacity to prophesy expenditures and revenues in
relatively ordinary times is minor when compared to changes of
magnitude due to disasters, economic upheavals, war, the coming
of peace after war, and the like. The Constitution is designed to
permit survival.

Wein v State of New York, 39 N.Y.2d 136, 142 (1976) (emphasis added).

The historic fiscal crisis that currently is gripping the State plainly constitutes

“extraordinary and emergency” circumstances that must be considered when determining

whether the temporary cash management actions taken by the Governor and Budget Director

violated the separation of powers doctrine. As set forth above, we are not dealing with one

branch’s clear encroachment on another’s core function. Rather, the powers may be viewed as

complementary. The law and historic practice amply support the Executive’s role in managing

the State’s day-to-day fiscal affairs. Taking a commonsense view of defendants’ cash-saving

measures in light of the State’s aberrant fiscal situation, it is obvious that defendants merely used

this complementary authority to protect the State’s fisc. Accordingly, defendants’ temporary

delay in releasing the funds at issue does not violate the separation of powers doctrine.

20
 As explained above, the Governor and Budget Director plainly have authority to take the

cash management measures at issue here. Assuming, arguendo, that their actions are not viewed

as an Executive function, their actions were still proper as an exercise pursuant to a valid

delegation of legislative authority codified in the Certification Provision, Executive Law § 180,

and State Finance Law § 23. Boreali v. Axelrod, 71 N.Y.2d 1, 10 (1987); Matter of Levine v.

Whalen, 39 N.Y.2d 510, 515 (1976). The Court of Appeals has upheld “legislative delegations

of authority that are circumscribed in only the most general of terms,” including in the “public

interest.” Boreali, 71 N.Y.2d at 10 (emphasis added); Matter of Levine, 39 N.Y.2d at 517.

Even if the statutes cited above did not expressly delegate to the Budget Director the authority to

delay payment of money to avert insolvency, that power necessarily is implied in those

provisions. Matter of Beer Garden v. New York State Liq. Auth., 79 N.Y.2d 266, 276 (1992);

see also Matter of Mercy Hosp. of Watertown v. New York State Dept., 79 N.Y.2d 197, 203

(1992).

2. Matter of County of Oneida v. Berle is Not Controlling.

Relying almost exclusively on Matter of County of Oneida v. Berle, 49 N.Y.2d 515

(1980), plaintiffs contend that “[n]either . . . the Governor nor the budget director has any lawful

authority or discretion to impound funds appropriated by statute.” Plaintiffs’ Memorandum of

Law, at 18. However, Berle is distinguishable and is not controlling here and, thus, plaintiffs’

reliance on it is misplaced.

In Berle, the Legislature enacted a $26 million appropriation to fund the sewage works

reimbursement program, which aided municipalities in operating and maintaining sewage

treatment works. Nevertheless, the Director of the Budget declined to expend – i.e., impounded

– $7 million of the total appropriation. Respondents, including the Budget Director, argued that

21
the Governor was obligated to maintain a balanced budget throughout the fiscal year and, to

accomplish that goal, possessed implied constitutional power to permanently reduce

appropriations enacted as part of the budget.

The Court rejected this argument, concluding that while the Constitution mandates that

the Governor propose a balanced Executive Budget, it imposes no duty on him or her to maintain

a balanced budget throughout the year. Berle, 49 N.Y.2d at 521. The Court noted that the

respective roles of the executive and legislative branches in budgetary matters are set forth in the

Constitution and, thus, “the implication of executive power to impound funds” would be

inconsistent with the constitutional division of powers “among three co-ordinate and coequal

branches.” Id. at 522, citing N.Y. Const. art. III, § 1; art. IV, § 1; art. VI; Matter of Nicholas v.

Kahn, 47 N.Y.2d 24, 30 (1979); Saxton v Carey, 44 N.Y.2d 545 (1978). The Budget Director’s

failure to pay the $7 million constituted an inappropriate attempt to override a legislative

enactment and constituted a “usurpation of the legislative function.” Id. at 523.

Alternatively, respondents in Berle contended that the appropriation statute provided the

Budget Director with discretionary authority to withhold funds designated for the sewage

treatment aid program. The appropriation stated: “‘The moneys hereby appropriated . . . shall be

apportioned in accordance with regulations promulgated by the commissioner of environmental

conservation and as approved by the director of the budget.’” Id. at 520, n.3, quoting L. 1976,

ch. 53. The Court rejected the alternative argument as well, determining that the appropriation

did not confer unfettered discretion upon the director to withhold all or any portion of the

appropriation. Id. at 524.

This case is fundamentally distinguishable from Berle. Simply stated, in this case, no

funds have been impounded. Further, monitoring and managing cash on a daily basis is distinct

22
from budget balancing concerns at issue in Berle. Megna Affid. ¶ 15. Here, the Governor and

Budget Director have not overridden the legislative enactment by permanently refusing to pay

funds appropriated by such enactment. See Interstate Sanitation Commn., 140 Misc.2d 252.

Instead, the Governor and the Budget Director have definitively asserted that the Budget

Director’s use of the Certification Provision to approve all but 10 percent of the School Aid

obligation and all but 19 percent of the STAR payment is a temporary emergency cash flow

measure. Megna Affid., ¶ 5. Approval of the remaining amounts has been delayed, and those

funds will be approved as soon as sufficient revenues are available – probably in mid-January

2010, and no later than the close of the fiscal year. Id. This temporary delay does not violate

any constitutional or statutory provision, including the Education Law. See Education Law §

3609-a; Point I(C), supra (explaining that the payment schedule set forth in Education Law §

3609-a is directory, not mandatory). Moreover, while the permanent reduction of funds in Berle

constituted an unlawful impoundment, here, by contrast, the temporary partial payment was

merely a pedestrian exercise of the Executive’s day-to-day cash management authority.

Alternatively, in Berle, the appropriation did not contain a provision, like the

Certification Provision, delegating the Budget Director, or any other agency, the authority to

delay payment of money pending certification. Rather, the appropriation in Berle merely

delegated to the Department of Environmental Conservation (DEC) (as approved by the Budget

Director) the authority to promulgate regulations establishing the manner in which appropriated

funds were to be paid to municipalities. Berle, 49 N.Y.2d at 520 n.3. In other words, in Berle,

the Legislature delegated to DEC the power to establish how the funds should be apportioned,

but not when the municipality would receive the funds. In this case, the Legislature delegated to

23
the Governor and Budget Director, pursuant to the Certification Provision, the power to manage

the State’s cash to ensure its solvency. Megna Affid., ¶ 22.

Notably, in Berle, the Court of Appeals recognized that “[f]rom a fiscal standpoint, it

may be desirable to attempt to maintain revenues and expenditures in rough balance throughout

the year. And it is not suggested that State government is powerless to do so by appropriate and

constitutional means.” Id. at 523-524. The acts taken by the Governor and Budget Director at

issue are not matters of paper accounting or budget balancing; instead, they are temporary cash

management measures taken in response to the State’s precarious fiscal situation and pursuant to

the Governor’s cash management authority. Ultimately, the State cannot make expenditures

where cash is not available. This scenario was neither at issue, nor contemplated by the Berle

court.

3. The Court Should Exercise Restraint in its Review of the Executive’s Operational
Determination in this Time of Fiscal Crisis.

As demonstrated above, the Governor and the Budget Director possessed authority to

temporarily delay partial payment of an appropriation in order to ensure the State’s continued

fiscal solvency. Thus, the issue involved here merely concerns cash management, not the scope

of a particular governmental branch’s constitutional authority. Courts are not the branch best

suited for cash management determinations and, thus, the Court should decline plaintiffs’

invitation to engage in judicial budget oversight. Pataki v. New York State Assembly, 4 N.Y.3d

75, 97 (2004); Saxton, 44 N.Y.2d at 550.

Entertaining suits, like this one, commenced by individuals and organizational

representatives will invite more of the same. Because economic conditions are not accurately

predictable, further delays in payments to various groups may be required. In that case, similar

law suits could follow, resulting in piece-meal litigation and, perhaps, inconsistent results. Races

24
to the courthouse would ensue as each local interest would seek to protect its perceived share.

To prevent this flood of potential, unnecessary litigation, the Court should refuse to reach the

issue of budget management presented by plaintiffs.

In sum, in this case, defendants did not unconstitutionally impound the funds at issue or

usurp the Legislature’s function. Rather, to ensure the State’s continued fiscal vitality

defendants temporarily delayed payment of the funds through the appropriate and constitutional

means afforded to them by the Governor’s authority. It is the Governor who is in the best

position to make the necessary day-to-day decisions necessary to prevent fiscal chaos and ensure

the delivery of services consistent with legislative intent.

B. The Temporary Reduction of Local Assistance Payments as Part of a Cash

Management Strategy to Avoid the State’s Insolvency During a Historic Fiscal
Crisis Does Not Violate the Education Article of the Constitution.

Plaintiffs allege, in wholly conclusory fashion, that the temporary reduction of payments

unconstitutionally will interfere with the right of New York State children to receive a sound

basic education pursuant to Article XI, § 1, the Education Article of the State Constitution. See

Plaintiffs= Memorandum of Law, Point III, pages 22-23. Plaintiffs’ conclusory allegations do not

state a claim under the Education Article.

1. The Plaintiffs Fail To State A Cause of Action Under The Education Article.

In its entirety, the Education Article of the Constitution provides:

AThe legislature shall provide for the maintenance and support of a system
of free common schools, wherein all the children of this state may be educated.@

N.Y. Const. article XI, § 1. This provision requires the State "to offer all children the

opportunity of a sound basic education." Campaign for Fiscal Equity v. State of New York, 86

N.Y.2d 307, 316 (1995) [ACFE I@]). That phrase has been interpreted by the Court of Appeals to

25
mean that the State must ensure that New York's public schools are able to teach "the basic

literacy, calculating, and verbal skills necessary to enable children to eventually function

productively as civic participants capable of voting and serving on a jury." CFE I, 86 N.Y.2d at

316. The constitutional standard requires the State to assure minimally acceptable facilities and

services, not aspirational ones. See Board of Educ., Levittown Union Free School Dist. v.

Nyquist, 57 N.Y.2d 27, 47-48 (1982).

“Fundamentally, an Education Article claim requires two elements: the deprivation of a

sound basic education, and causes attributable to the State. As our case law makes clear, even

gross educational inadequacies are not, standing alone, enough to state a claim under the

Education Article.” New York Civil Liberties Union v. State of New York, 4 N.Y.3d 175, 178-

89 (2005), rearg. denied, 4 N.Y.3d 882 (2005). Thus, allegations “of academic failure alone,

without allegations that the State somehow fails in its obligation to provide minimally acceptable

educational services, are insufficient to state a cause of action under the Education Article.”

New York Civil Liberties Union, 4 N.Y.3d at 180, citing, Paynter v. State of New York, 100

N.Y.2d 434, 440 (2003); New York State Assoc. of Small City School Districts v. State of New

York, 42 A.D.3d 648 (3d Dept. 2007); see CFE I, 86 NY.2d 307, 316.

In addition, a party alleging a violation of the Education Article must Aestablish a causal

link” between the funding system and any alleged failure to provide the opportunity for a sound

basic education. CFE I, 86 NY2d at 318; see also CFE II, 100 N.Y.2d at 919-20. The Court of

Appeals in Paynter v. State of New York, 100 N.Y.2d 434 (2003), reiterated the requirement

that, to state a claim, plaintiffs must allege a causal link between State activity and educational

failure:

[T]he elements of the C.F.E. plaintiffs= viable Education Article

claim consisted of evidence, first, that the State fails to provide

26
 them a sound basic education . . . and, second, that this failure is
causally connected to the funding system.

Paynter, 100 N.Y.2d 434, 440 (emphasis added). A failure to plead either element satisfactorily

will prompt dismissal.

Moreover, these elements must be pleaded with specificity. “Plaintiffs must allege and

specify gross educational inadequacies that, if proven, could support a conclusion that the State’s

public school financing system effectively fails to provide for a minimally adequate educational

opportunity.” CFE I, 86 NY2d 319. In contrast to the CFE plaintiffs, plaintiffs in this case

allege neither gross inadequacy nor causation with any degree of specificity. As the majority in

CFE II observed in responding the dissenters’ concerns that that case would “inspire a host of

imitators,” the CFE plaintiffs ultimately prevailed “owing to a unique combination of

circumstances” in the New York City schools. CFE II, 100 NY2d at 932. Plaintiffs in this case

have not pleaded facts showing that the Governor’s actions constitute unique circumstances that

state a claim under the Education Article.

The Education Article is not implicated merely because the State makes adjustments to

amounts or timing of State education aid payments to the nearly 700 school districts across the

State. While the courts may evaluate State financing plans for education to determine

constitutional adequacy, the Court of Appeals has cautioned that they must Atread carefully@

while doing so. Campaign for Fiscal Equity, Inc. v. State of New York [ACFE III@], 8 N.Y.3d 14,

28 [2006]). The courts “have neither the authority, nor the ability, nor the will, to micromanage

education financing." Campaign for Fiscal Equity v State of New York [ACFE II@], 100 N.Y.2d

893, 925 (2003). Even at the remedial context after the Court had found a violation with respect

to the New York City schools, the Court of Appeals in CFE III deferred to the reasonable

determinations of the Executive on budgetary issues, including the need to phase in further

27
funding over a four year period. ADevising a state budget is a prerogative of the Legislature and

Executive; the Judiciary should not usurp this power. The legislative and executive branches of

government are in a far better position than the Judiciary to determine funding needs throughout

the state and priorities for the allocation of the State's resources.@ CFE III, 8 N.Y.3d 28-29.

Thus the Court erected a "formidable burden" on "one who attacks the budget plan." Wein v

Carey, 41 N.Y.2d 498, 505 (1977).

In this case, plaintiffs fail to allege facts suggesting that the temporary reductions in

School Aid and STAR payments have had or will have any impact on the quality of education

made available to students. This is particularly so in light of census data which shows that New

York spends more total per pupil than any other state and 63 percent above the national average.

The delayed payment represents $146 million of more than $21 billion of funding that schools

will receive this fiscal year from the State. Furthermore School district budgets statewide,

including amounts obtained from property tax payments, are estimated to total in excess of $50

billion. Thus, the delay amount represents approximately twenty-nine hundredths percent (.29%)

of the total estimated funds available to school districts during this year. Megna Affid. ¶ @.

Should 19 percent of the January STAR payment also be delayed, the delayed payment amount

of $436 million would represent an additional eighty-seven hundredths percent (.87%) of total

school budgets. Thus, the total possible delay in payments to schools would amount, at most, to

approximately 1.2 percent of total school budgets. Plaintiffs cannot state a claim for a violation

of the Education Article without alleging some factual basis for their speculative conclusion that

this deferral of resources will have so substantial an impact that it will violate the State=s

responsibility to maintain and support a system of free public schools.

28
 2. This Matter Is Non-Justiciable.

In the exercise of its discretionary powers, this Court should refrain from entertaining an

action challenging the Governor’s ability to defer payments to school districts in times of

revenue shortfalls. Justiciability is a far-reaching concept that incorporates, among other thing,

the doctrines of separation of powers, ripeness and mootness, and primary jurisdiction. AThe

paramount concern is that the judiciary not undertake tasks that the other branches are better

suited to perform. Acquiring data and applying expert advice to formulate broad programs

cannot be economically done by the courts.@ Klostermann v. Cuomo, 61 N.Y.2d 525,535

(1984). Thus, the way the State addresses complex societal and governmental issues is a subject

that the courts leave to the discretion of the legislative and executive branches, especially when

these branches must choose among competing valid approaches and allocate limited resources.

Id.; see CFE III, 8 N.Y.3d 28-30; Jones v. Beame, 45 N.Y.2d 402, 408 (1978); Bernstein v.

Toia, 43 N.Y.2d 437 (1977).

So long as the Executive=s action is not irrational, this Court should not interfere in an

area where the Executive is better suited to make the necessary fiscal decisions necessitated by

unprecedented economic downturn which delays it from making an anticipated payment

identified in Education Law § 3609-a. In the exercise of his best and prudent judgment, the

defendant Governor has determined that the it is in the best interests of the entire State that a

portion of the payment due to schools districts under this statute be deferred so that the enough

cash remains on hand for the State to pay the many other obligations with which it is faced. It

may be that some of those obligations will be not be paid in full or on time for the same reason

that the Governor has determined that a portion of the 3609-a payment should be held in

29
abeyance. His decision to do so given the State=s financial position can hardly be regarded as

arbitrary or irrational.

C. The Plaintiffs Fail to State a Claim for Violation of Section 3609-a of the
Education Law.

Education Law ' 3609-a (1)(a)(4) provides a schedule for eligibility of payments of State

aid to school districts. Education Law ' 3609-a (1) (a) (4). However, statutory provisions which

direct an official to do an act at a certain time, though not making performance at that time

essential are generally held to be directory only, and a delay in performance will not invalidate a

proceeding under the statute or terminate jurisdiction unless the statute says so in language or by

an implication necessarily to be drawn from the statutory context.

AWhere a statute simply provides a time limit in which an agency is to act, such
time limit is generally considered to be directory and not mandatory (see Matter
of Sarkisian Bros. v State Div. of Human Rights, 48 NY2d 816, 817-818
[interpreting time limits contained in section 297 of the Executive Law]).
However, where the statute not only provides a time limit, but also a limitation on
the authority of the agency to act after the time period, the limit will be viewed as
mandatory ( Matter of Brenner v Bruckman, 253 App Div 607, 610, app dsmd
278 NY 503).@

400 Delaware Ave. Property Co. v. State Div. of Housing, 105 A.D.2d 1046, 1046-1047 (3d

Dept. 1984); see also Matter of City of New York v. Novello, 65 A.D.3d 112, 116 (1st Dept.

2009) (AWith regard to provisions directing public officials to take action within certain time

limits, the general rule is that such limits will be considered directory, absent evidence that such

requirements were intended by the Legislature as a limitation on the authority of the body or

officer [citations omitted]. Conversely, a mandatory interpretation is justified where >the nature

of the act to be performed, or the language used by the legislature [shows] that the designation of

the time was intended as a limitation of the power of the officer=[citation omitted] @ ). "[U]nless

the language used by the Legislature shows that the designation of time was intended as a

30
limitation on the power of the body or officer, the provision is directory rather than mandatory"

Matter of Grossman v. Rankin, 43 N.Y.2d 493, 501 (1977); see also Matter of Sullivan v.

Siebert, 70 A.D.2d 975 (3d Dept. 1979); Matter of Rochester Gas & Elec. Corp. v. Maltbie, 272

App Div 162 (3d Dept. 1947). In Sullivan, the court dismissed a request for an order in the

nature of mandamus to compel certain state agencies to issue annual reports by a date certain in

compliance with Executive Law § 164, because the report requirement was merely directory.

Even where the seemingly mandatory word "shall" is used courts have found statutory direction

as to time to be precatory. Figueroa v. Market Training Inst., 167 A.D.2d 503, 506 (2d Dept.

1990); compare Matter of City of New York v. Novello, 65 A.D.3d at 116. In Novello, the

First Department ruled that in determining whether a statutory provision was directory or

precatory, the Legislature, in coupling an affirmative directive that the administrative act must be

done "as soon as possible" with the negative prohibition "in no event later than three months"

intended that a specific time provision must be met, and was thus tantamount to an unmistakable

limitation on the agency’s authority to act once the time period was closed. Education Law §

3609-a does not include such additional phrasing as that involved in Novello, thus supporting the

conclusion that the dates for performance itemized there are merely precatory.

Education Law sections 3609-b and 3609-f which also provided for scheduled aid

payments by the State to its school districts support the conclusion that the provision in 3609-a is

precatory. The distinction between 3609-a and 3609-b and -f is merely the conditional nature of

the 3609-a payments (…districts shall be eligible to receive payments…”) while the 3609-b and

–f payments are not so qualified. The eligibility criteria for 3609-a payments is the requirement

that district, as a pre-condition to payment, have filed required reports with the Commissioner of

Education (“Such amounts shall be payable only to the extent that reports due the commissioner

31
have been filed.” Education Law 3609-a 1. a. (4)). No such contingency is specified for the

payments under 3609-b or –f. All three sections, while providing schedules for the payments to

districts provided thereunder, are precatory rather than mandatory in the absence of clear

legislative intent to the contrary. Figueroa , 167 A.D.2d at 506;Matter of City of New York, 65

A.D.3d at 116.

D. Mandamus Does Not Lie.

“Mandamus lies to compel the performance of a nondiscretionary, ministerial duty where

there has been a showing of a clear legal right to the relief sought.” Matter of Hassig v. New

York State Dept. of Health, 5 A.D.3d 846 (3d Dept. 2004), quoting Matter of Mitchell v. Essex

County Sheriff's Dept., 302 A.D.2d 732, 734 (3d Dept. 2003), lv. denied 100 N.Y.2d 506 (2003).

However, mandamus is not available “to compel an act which involves an exercise of judgment

or discretion.” Matter of Brusco v. Braun, 84 N.Y.2d 674, 679 (1994); Matter of Jay Alexander

Manor v. Novello, 285 A.D.2d 951, 952 (3d Dept. 2001), lv. denied 97 N.Y.2d 610 (2002).

Additionally, “mandamus will lie against an administrative officer only to compel him to

perform a legal duty, and not to direct how he shall perform that duty.” Klostermann v. Cuomo,

61 N.Y.2d 525, 540 (1984), quoting People ex rel. Schau v. McWilliams, 185 N.Y. 92, 100

(1906).

In relevant part, Education Law § 3609-a (1)(a)(4) states: “districts shall be eligible to

receive payments” on certain enumerated dates, including December 15. Emphasis added.

Accordingly, as explained in Point I(C), the payment schedule set forth in Education Law §

3609-a is directory, not mandatory. In other words, no legal duty exists requiring the Budget

Director to automatically pay the full appropriation on December 15 and, thus, that act is not a

ministerial duty.

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 Moreover, as demonstrated above, the Governor and Budget Director possess authority to

temporarily make partial payment of an appropriation in order to preserve the State’s solvency.

Taken in conjunction, the precatory nature of Education Law § 3609-a and the executive

branch’s authority to temporarily make partial payment conclusively demonstrate that plaintiffs

do not have a clear legal right to the relief they seek. Rather, the Budget Director possesses

discretion to certify the funds before after December 15, taking into account the State’s financial

circumstances. Because the Budget Director possesses this discretion, plaintiffs are

inappropriately attempting to direct him in the performance of his discretionary duties.

Accordingly, mandamus does not lie.

D. Plaintiffs do Not Have Standing to Maintain This Action.

“Standing is, of course, a threshold requirement for a plaintiff seeking to challenge

governmental action.” New York State Assn. of Nurse Anesthetists v. Novello, 2 N.Y.3d 207,

211 (2004)). The burden to establish standing rests squarely with the plaintiffs. Society of the

Plastics Industry, Inc. v. County of Suffolk, 77 N.Y.2d 761, 769 (1991). Standing may be

conferred by statute or established under the common law. Id. at 769-72. Presumably the

plaintiff organizations assert common law organizational standing. The individual plaintiffs

assert statutory standing under Article 7-A of New York Finance Law. Complaint ¶¶ 2, 5, 8, 10,

14, 17, 20, 22, 24, 29. Because plaintiffs fail to establish either statutory or common law

standing, they cannot establish a likelihood of success on the merits. Their motion for a

preliminary injunction should therefore be denied.

1. The plaintiff organizations cannot establish standing.

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 According to the complaint, (1) plaintiff New York State United Teachers (NYSUT) is

the State’s largest union of teachers (Complaint ¶ 27); (2) plaintiff NYSSBA is a membership

corporation representing most of the public school districts in New York State, the president of

which is plaintiff Schlifke (Complaint ¶ 26); (3) plaintiff School Administrators Association of

New York State is a professional association representing principal and other school

administrators (Complaint ¶ 28), the president of which is plaintiff Kruszynski (Complaint ¶ 19);

and (4) the New York State Council of School Superintendents, about which no specific

allegations are made. Presumably, these plaintiffs claim organizational common law standing.

Because the complaint fails to establish either the requisite “in fact injury” the organizational

plaintiffs cannot demonstrate standing.

“Where organizations seek standing to challenge administrative agency actions, there

must exist concrete adversarial interests requiring judicial intervention.” Rudder v. Pataki, 93

N.Y.2d 273, 278 (1999). “To establish standing, an organizational plaintiff . . . must show that at

least one of its members would have standing to sue, that it is representative of the organizational

purposes it asserts and the case would not require the participation of individual members.” New

York State Assoc. of Nurse Anesthetists v. Novello, 2 N.Y. 3d 207, 211 (2004); accord Rudder,

93 N.Y.2d at 278; Society of the Plastics Industry, Inc. v. County of Suffolk, 77 N.Y.2d 761, 775

(1991).

The first inquiry in common law organizational standing analysis is whether the plaintiffs

have established “injury in fact.” New York State Assoc. of Nurse Anesthetists, 2 N.Y.3d at

211-212. “[S]tanding requires a showing of cognizable harm, meaning that an individual

member of plaintiff organizations has been or will be injured; tenuous and ephemeral harm . . . is

34
insufficient to trigger judicial intervention.” Id. at 214 (internal quotation marks omitted).

Speculation as to future events is not sufficient to establish “injury in fact.” Id.

In New York State Assoc. of Nurse Anesthetists v. Novello, 2 N.Y.3d 207, 211 (2004),

plaintiffs challenged guidelines issued by the Department of Health, which, in relevant part,

required doctors to supervise the administration of anesthesia in private office settings. 2 N.Y.3d

at 210-11. The plaintiffs, certified registered nurse anesthetists (CRNAs), claimed that because

physicians would find it cost-prohibitive to hire both anesthesiologists and CRNAs, the

guidelines effectively prohibit CRNAs from working in private office settings. Id. at 212. The

Court of Appeals rejected the plaintiffs’ allegations of injury, finding them too speculative to

constitute “injury in fact.” Id. at 213.

Plaintiffs' complaint is devoid of any factual allegations to demonstrate that a single

organizational plaintiff has suffered or is in imminent danger of suffering injury. Indeed, with

the exception of a conclusory assertion that each plaintiff is “specifically aggrieved” (Complaint

29) and speculation based upon information and belief (Complaint ¶ 67), the only allegations of

injury consist of speculation that school children will be deprived of their constitutional right to a

sound basic education. See Complaint ¶¶ 68, 76. Not a single organizational plaintiff is able to

assert that they represent school children. More importantly, not a single organization asserts

that even one of its members has or will suffer injury.

Simply put, the complaint falls far short of demonstrating the requisite “in fact injury”

required to establish standing. Perhaps in recognition of the complaint's deficiency, plaintiffs

submit the hearsay-laden, attorney affidavit of Michele Victoria Handzel-Miller. Ms. Handzel-

Miller, who represents plaintiff Seth Turner, asserts that because the collective bargaining

agreement between Saugerties Central School District, of which her client is superintendent, and

35
the teachers union, her client was compelled to send out notices advising 36 teachers that they

may be laid off. Handzel-Miller Affidavit, ¶ 28. She further asserts that Saugerties will be

compelled to lay off 20 teachers if the State aid payments are delayed or withheld. Id. at ¶ 27.

As an initial matter, Ms. Handzel-Miller's affidavit is “without evidentiary value” and must be

disregarded. Zuckerman v. City of New York, 49 N.Y.2d 557, 563 (1980); accord Murphy v.

Feduke, 14 A.D.2d 722, 723 (3d Dept. 1988). Moreover, she fails to establish how a delay in

payments will force lay-offs or how the school district could not have managed the impact of the

temporary delay in a portion of School Aid and Star payments to avoid such action.

Plaintiffs' vague and conclusory allegations of injury as a result of a delay in school aid is

more speculative than the allegations of the plaintiffs in New York State Assoc. of Nurse

Anesthetists. See 2 N.Y.3d at 217-221 (J. Smith dissenting) (setting forth the “extensive

evidence” submitted by plaintiffs in an effort to establish injury in fact). Because these

allegations, which are made “upon information and belief” are based upon nothing more than

“layers of speculation” the organizational plaintiffs fail to satisfy their burden to demonstrate

“injury in fact.” Id. at 213. Therefore they lack standing and their motion for a preliminary

injunction should be denied.

2. The individual plaintiffs cannot establish standing.

According to the complaint: (1) plaintiff Douglas Becker is a homeowner, taxpayer,

parent of a student, teacher and president of a local teachers’ union within the Churchville-Chili

Central School District, but sues as a citizen-taxpayer (Complaint ¶¶ 5-7); (2) plaintiff Brian A.

Boyd is a homeowner, taxpayer, and teacher in the Yonkers City School District (Complaint ¶¶

8-9); (3) plaintiff George Heidcamp is a homeowner and taxpayer of the Saugerties Central

School District and the president of the Saugerties School Board (Complaint ¶¶ 10-11); (4)

36
plaintiff Paul M. Hetland is a homeowner, taxpayer and teacher in the Rochester City School

District (Complaint ¶¶ 12-13); (5) plaintiff Florence D. Johnson is a homeowner and taxpayer in

the Buffalo City School District, a member of the Buffalo Board of Education, and the vice-

president and president-elect of the New York State School Boards Association (NYSSBA)

(Complaint ¶¶ 14-16); (6) plaintiff Peter Kruszynski is a homeowner and taxpayer in the

Lancaster Central School District, the parent of children in schools within the State, the principal

of Lancaster Middle School, and the president of the School Administrators Association of New

York State (Complaint ¶¶ 17-19); (7) Kimberly Petramale is a homeowner, taxpayer, teacher and

parent of children in the Saugerties Central School District (Complaint ¶¶ 20-21); (8) plaintiff

Harry B. Reeder is a homeowner, taxpayer and member of the school board in the Herkimer

Central School District; (9) Wayne E. Schlifke is a homeowner and taxpayer of the Alden School

District (Complaint ¶ 14) and the president of NYSSBA (Complaint ¶ 26); and, (10) plaintiff

Seth Turner is a homeowner and taxpayer in the Saugerties Central School District (Complaint ¶

25). The complaint alleges that each individual plaintiff is aggrieved by defendants’ actions and

each plaintiff also has standing, as a taxpayer, to sue under State Finance Law Article 7-A.

Complaint ¶ 29. Plaintiffs are incorrect.

a. No taxpayer standing

Article 7-A of New York Finance Law provides standing to citizen taxpayers against an

officer of the state who “has caused, is now causing, or is about to cause a wrongful expenditure,

misappropriation, misapplication or any other illegal or unconstitutional disbursement of state

funds.” N.Y. State Fin. L. § 123-b (McKinney 2009) (emphasis supplied). “Standing pursuant

to State Finance Law § 123-b is narrowly construed . . . .” Kennedy v. Novello, 299 A.D.2d 605,

607 (3d Dept. 2002), appeal denied, 99 N.Y.2d 507 (2003), citing Rudder v. Pataki, 93 N.Y.2d

37
273, 281 (1999), Matter of Transactive Corp. v. New York State Dept. of Social Services, 92

N.Y.2d 579, 589 (1998); accord, Humane Society of the United Sattes v. Empire Devt. Corp., 53

A.D.3d 1013, 1016 (3d Dept. 2008). The narrow construction is predicated on the potential

danger of “interpos[ing] litigating plaintiffs and the courts into the management and operation of

public enterprises.” Matter of Transactive Corp., 92 N.Y.2d at 589.

The plain language of Article 7-A of New York Finance Law limits its applicability to

the wrongful “expenditure, misappropriation, misapplication of any other illegal or

unconstitutional disbursement of state funds.” N.Y. State Finance L. § 123-b. The statute

“offers a means for citizen taxpayers to challenge illegal or improper disposition of state funds or

property, but provides no avenue for taxpayers seeking the allocation of additional funds.” New

York State Assn. of Small City School Dists. v. State of New York, 42 A.D.3d 648, 650 (3d

Dept. 2007); accord Matter of Messina v Sobol, 159 AD2d 916, 918 (3d Dept 1990); Matter of

Sullivan v. Siebert, 70 A.D.2d 975 (1979). For example, in New York State Association of

Small City School Dists., the individual plaintiffs challenged the constitutionality of New York’s

education funding system, which they asserted deprived them of the “minimum funding

necessary to provide their students with the opportunity to achieve a sound basic education as

mandated by the Education Article.” Id. at 648, 649. Because the plaintiffs did not challenge the

disposition of state funds, the Appellate Division, Third Department, held that they lacked

standing under Article 7-A. Id. at 650-51.

The court noted that in some cases, citizen-taxpayer standing had been found based on

the argument that state funds or property had been illegally withheld, rather than expended, but

those cases “involved funding set aside for a specific purpose and then, allegedly, improperly

allocated.” New York State Assoc. of Small City School Districts, 42 A.D.3d at 650, citing

38
Childs v Bane, 194 A.D.2d 221, 225 (1993), appeal dismissed, 83 N.Y.2d 846 (1994), lv denied

83 NY2d 760 (1994); Community Serv. Socy. v Cuomo, 167 A.D.2d 168, 170-171 (1990). In

contrast, the court found that the complaint in New York State Assoc. of Small City School

Districts

does not address any specific defects or illegalities in the State’s methodology in
allocating funds, but broadly asserts that the school districts do not get sufficient
funding. “[A] claim that state funds are not being spent wisely is patently
insufficient to satisfy the minimum threshold for standing” (Saratoga County
Chamber of Commerce v Pataki, 100 NY2d 801, 813, 798 NE2d 1047, 766
NYS2d 654 [2003], cert denied 540 U.S. 1017, 124 S. Ct. 570, 157 L. Ed. 2d 430
[2003]). Accordingly, under these circumstances, we agree with Supreme Court
that the individual board members have not stated a cause of action under State
Finance Law § 123-b.

New York State Assoc. of Small City School Districts, 42 A.D.3d at 650-51.

Similar to the plaintiffs in New York State Association of Small City School Districts,

the individual plaintiffs here do not allege an illegal disposition of state funds. Rather, they

challenge a delay in the disposition of state funds. Plaintiffs do not, and cannot, allege that

defendants are illegally disposing of any funds. Therefore, they fall squarely within the Third

Department’s ruling in New York State Association of Small City School Districts.

b. No standing as school board members.

It is not clear whether plaintiffs Johnson and Reeder are relying on their positions as

members of the Buffalo Board of Education and the Herkimer Central School District

respectively to establish their standing to bring this action. In any event, they lack standing to

sue as school board members.

The individual plaintiffs in New York State Assoc. of Small City School Districts were

school board member who sought standing as citizen taxpayers. 42 A.D.3d at 650. Accordingly,

39
under the Third Department's decision, they lack standing. Id. at 651. The court further

addressed the potential common-law standing of the individual school board members, holding

that the test set forth in State Finance Law § 123-b would prevail unless “'failure to accord such

standing would be in effect to erect an impenetrable barrier to any judicial scrutiny of legislative

action.'” New York State Assoc. of Small City School Districts, 42 A.D.3d at 651, quoting,

Matter of Transactive Corp. v. New York State Dept. of Social Servs., 92 N.Y.2d 579, 589

(1998), quoting Boryszewski v. Brydges, 37 N.Y.2d 361, 364 (1975); Matter of Colella v. Board

of Assessors of County of Nassau, 95 N.Y.2d 401, 410 (2000); Matter of Parete v. Maloney, 20

AD3d 712, 713 (2005). Because the parents and students of school districts can challenge the

constitutionality of funding for their schools, the action of the State was not insulated from

judicial scrutiny. In any event, because the individual school board members failed to assert

“proof of special harm different in kind and degree from the community in general” they are not

eligible for common-law taxpayer standing. New York State Assoc. of Small City School

Districts, 42 A.D.3d at 651, citing Matter of Town of Riverhead v. New York State Bd. of Real

Prop. Servs., 7 A.D.3d 934, 936 (2004), aff’d 5 N.Y.3d 36 (2005).

Moreover, any allegations of harm are conclusory and speculative and cannot be relied

upon as the basis for citizen-taxpayer standing.

POINT II

PLAINTIFFS FAIL TO SHOW IRREPARABLE HARM

The plaintiffs fail to demonstrate the irreparable harm necessary to support the issuance

of a preliminary injunction. The Court of Appeals more than a century ago described what

constitutes sufficiently irreparable harm: AInjury, material and factual, not fanciful or theoretical,

40
or merely possible, must be shown as the necessary or probable results of the action sought to be

restrained.@ See State of New York v. Canal Board of State of N.Y., 55 N.Y. 390, 397 (1874).

The harm to which the plaintiffs point does not satisfy this standard. The plaintiffs first

claim that constitutional separation of powers will be harmed if the defendants are not

preliminarily restrained. See Plaintiffs= Memorandum of Law, page 13-14. The plaintiffs also

allege that the right of the people to be heard will be also be irreparably harmed absent pendente

lite restraint of the defendants Id. at page 14. Finally plaintiffs point to the various affidavits of

attorneys Reilly, Worona, Handzel-Miller, and of Peter Kruszynski, Susan Lipman, Peter

Mannella and Steven VanHoesen in support of their claim of irreparable harm. Plaintiffs=

Memorandum of Law, pages 14-15. Of these affiants, only Mr. Kruszynski is a plaintiff in this

action. These affidavits are replete with legal arguments (e.g. Affidavit of Robert T. Reilly),

hearsay (Affidavit of Jay Worna, and Michele Victoria Handzel-Miller) and unsupported

conclusory allegations and speculation (Affidavits of Peter Kruszynski, Susan Lipman, Peter F.

Mannella and Steven VanHoesen) served up in the guise of admissible testimony to support the

allegation that irreparable harm will befall the plaintiffs if the defendants= action is not

preliminarily restrained. The speculative injury alleged by the plaintiffs plainly lacks the

certainty and immediacy necessary to demonstrate Airreparable@ harm. See Valentine v.

Schembri, 212 A.D.2d 371, 371 (1st Dept 1995) (Aspeculative@ harm does not constitute

acceptable substitute for proof of actual harm); Matter of Billings, 241 A.D.2d 452, 453 (2d Dept

1997) (requested relief denied where movant failed to show Aimmediate and irreparable harm@).

The plaintiffs cannot point to any actual harm that will be suffered by any individual student or

groups of students if their motion for a preliminary injunction is denied. In fact, the plaintiffs=

41
papers are totally devoid of any proof in admissible form demonstrating harm, irreparable or

otherwise, to any student in the State of New York. See Valentine, 212 A.D.2d at 371.

In McCall v. State, 215 A.D.2d 1 (3d Dept. 1995) the Court held that absent

extraordinary circumstances, which it found not to be present, a delay in payment of an

additional benefit, though it may affect a person's quality of life in the interim, is simply not the

kind of injury that warrants the awarding of equitable relief. McCall, 215 A.D.2d at 6. That is

all that has happened here. A payment constituting twenty-five percent of annual school aid was

reduced by ten percent which will be paid as the State=s coffers replenish over time. Moreover,

the reserved funds at issue will be paid out by the close of the fiscal year. Money withheld today

can be replaced tomorrow. The withholding may cause harm, but that harm is not irreparable.

Accordingly, plaintiffs= motion for a preliminary injunction should be dismissed in the absence

of irreparable harm. The harm alleged by plaintiffs is purely speculative, and it is not credible

that the temporary reservation of 10 percent of School Aid and 19 percent of STAR payments

will have the impact which plaintiffs surmise. For this reason, plaintiffs’ application for a

preliminary injunction must be dismissed.

POINT III

THE BALANCE OF THE EQUITIES FAVORS THE DEFEFNDANTS

To show that the balance of the equities tips in a plaintiff=s favor, Ait must be shown that the

irreparable injury to be sustained by the plaintiff is more burdensome to it than the harm caused

to defendant through imposition of the injunction.” Nassau Roofing & Sheet Metal Co. v.

Celotex Corp., 70 A.D.2d 1021, 1022 (3d Dept. 1979), app. dismissed, 48 N.Y.2d 654 (1979),

citing Edgeworth Food Corp. v. Stephenson, 53 A.D.2d 588 (1st Dept. 1976). The equities in

this case weigh heavily against the issuance of a preliminary injunction.

42
 An order directing the relief sought by the plaintiffs on their motion for a preliminary

injunction would have a severe impact on the State and put at risk the financial structure of state

government and the delivery of services. See Megna Affid. ¶ __. While the plaintiffs seek to

avoid a temporary delay in school aid payments, the defendants have a broader responsibility.

The Governor and the Director have inherent authority to administer and manage the State’s cash

position to avoid financial insolvency in these extraordinary circumstances. Given the broad

scope of the Executive’s responsibilities and the relatively narrow scope of the plaintiffs=

interests, the equities here tip in favor of the defendants.

CONCLUSION

PLAINTIFFS’ APPLICATION FOR A PRELIMINARY INJUNCTION

SHOULD BE DENIED.

The plaintiffs fail to sustain their burden to demonstrate their entitlement to a preliminary

injunction, and their motion should be denied. They cannot demonstrate likelihood of success on

the merits, the irreparability of whatever harm they may experience if the defendants are not

preliminarily restrained, and that the balance of equities tips in their favor to warrant the issue of

the injunctive relief they seek. The plaintiffs are further hindered by the enhanced burden they

shoulder by reason of the affirmative relief they seek which would not maintain the status quo

but which would afford them the ultimate relief they seek in this action.

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Dated: Albany, New York
December 23, 2009
ANDREW M. CUOMO
Attorney General of the State of New York
Attorney for Defendants
The Capitol
Albany, New York 12224-0341

By: Robert A. Siegfried

Robert A. Siegfried
Assistant Attorney General, of Counsel
Telephone: (518) 473-5097
Fax: (518) 473-1572 (Not for service of papers)

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