LLC 2 PDF

State of New York
Supreme Court, Appellate Division

Third Judicial Department
Decided and Entered: March 29, 2018 524905
________________________________
In the Matter of BRENNAN

CENTER FOR JUSTICE AT
NYU SCHOOL OF LAW et al.,
Appellants, MEMORANDUM AND ORDER
v
NEW YORK STATE BOARD OF

ELECTIONS et al.,
Respondents.
________________________________
Calendar Date: January 12, 2018
Before: Garry, P.J., McCarthy, Egan Jr., Lynch and Pritzker, JJ.
__________
Emery Celli Brinckerhoff & Abady LLP, New York City

(Elizabeth S. Saylor of counsel) and Wendy R. Weiser, Brennan
Center for Justice at NYU School of Law, New York City, for
appellants.
William J. McCann Jr., New York State Board of Elections,

Albany, for New York State Board of Elections, respondent.
Sinnreich, Kosakoff & Messina, LLP, Central Islip (John

Ciampoli of counsel), for Edward Cox and another, respondents.
__________
Garry, P.J.
Appeal from a judgment of the Supreme Court (Fisher, J.),

entered March 16, 2016 in Albany County, which dismissed
petitioners' application, in a combined proceeding pursuant to
CPLR article 78 and action for declaratory judgment, to review a
determination of respondent State Board of Elections denying a
request to rescind said respondent's 1996 Opinion No. 1.
-2- 524905
The background of this matter is more fully discussed in

this Court's decision in a related appeal (Matter of Brennan Law
Ctr. for Justice at NYU School of Law v New York State Bd. of
Elections, ___ AD3d ___ [appeal No. 524950, decided herewith]).
In 1996, respondent State Board of Elections (hereinafter
respondent) issued 1996 Opinion No. 1 (hereinafter the 1996
opinion), which opines that limited liability companies
(hereinafter LLCs) are not subject to the campaign contribution
limits imposed upon corporations and partnerships by the Election
Law, and may thus make contributions subject to the higher limits
imposed upon individuals – a result known as the "LLC Loophole."
Critics assert that LLCs have acquired inordinate political
influence as a result of the 1996 opinion, but legislative
efforts to lower the contribution limits imposed upon them have
been unsuccessful.
In April 2015, one of respondent's commissioners made a

motion for respondent to direct its counsel to prepare an opinion
that would rescind the 1996 opinion and provide updated guidance
on the applicability of the Election Law's contribution limits to
LLCs. The motion failed in a tie vote when two of the four
commissioners voted against it (see Election Law § 3-100 [1],
[4]). Petitioners – the Brennan Center for Justice at NYU School
of Law and six individuals – then commenced this combined CPLR
article 78 proceeding and action for a declaratory judgment
against respondent seeking, among other things, a judgment
rescinding the 1996 opinion and ordering respondent "to issue a
new opinion or regulation consistent with the text and purpose of
the Election and [Limited Liability Company] Laws."1 Supreme
Court dismissed the petition/complaint, finding, among other
things, that petitioners lack standing. Petitioners appeal.
To establish standing to pursue this litigation,

petitioners must show that they have suffered injury-in-fact and
that the injury is within the zone of interests protected by the
statute at issue (see Matter of Association for a Better Long
1
Supreme Court granted a motion to intervene filed by
respondents New York Republican State Committee and Edward Cox.
-3- 524905
Is., Inc. v New York State Dept. of Envtl. Conservation, 23 NY3d

1, 6 [2014]; Matter of Animal Legal Defense Fund, Inc. v
Aubertine, 119 AD3d 1202, 1203 [2014]). Here, as in the related
appeal, the contested issue is the injury-in-fact element, which
requires a showing that petitioners "will actually be harmed by
the challenged action. As the term itself implies, the injury
must be more than conjectural" (Matter of Graziano v County of
Albany, 3 NY3d 475, 479 [2004] [internal quotation marks,
ellipsis and citation omitted]).
The six individual petitioners are current or former

legislators or candidates for legislative office. The Brennan
Center describes itself as "a not-for-profit, non-partisan public
policy and law institute that focuses on issues of democracy and
justice." Petitioners assert that respondent should have granted
the motion to rescind the 1996 opinion because the LLC Loophole
damages effective governance by intensifying the influence of
large financial contributions upon elections. As in the related
appeal, their arguments that the LLC Loophole raises issues "of
vital public concern" are persuasive, but do not, without more,
entitle them to standing (Society of Plastics Indus. v County of
Suffolk, 77 NY2d 761, 769 [1991] [internal quotation marks
omitted]; see Matter of Gilkes v New York State Div. of Parole,
192 AD2d 1041, 1042 [1993], lv denied 82 NY2d 654 [1993]). We
find that petitioners lack standing because they have not
established the required element of injury-in-fact.
To confer standing, a claimed injury may not depend upon

speculation about what might occur in the future, but must
consist of "cognizable harm, meaning that [a petitioner] has been
or will be injured" (New York State Assn. of Nurse Anesthetists v
Novello, 2 NY3d 207, 214 [2004] [internal quotation marks and
citation omitted; emphasis added]). Here, all of petitioners'
claims of injury resulting from the denial of the April 2015
motion rely upon the assumption that the LLC Loophole would have
been eliminated if the motion had been granted. That assumption
is not supported by the open-ended language of the motion, which
merely asked respondent to direct its counsel to prepare an
opinion "provid[ing] updated guidance on the applicability of
[Election Law] article 14 to [LLCs]." Nothing in this language
required the new opinion to eliminate the LLC Loophole. If
-4- 524905
respondent had granted the motion, the resulting opinion might

have reaffirmed the same analysis that established the LLC
Loophole in 1996, rather than providing the altered statutory
interpretation that petitioners contend should be adopted. Thus,
petitioners' claims of injury-in-fact rely upon events that might
not have occurred and are too speculative to demonstrate
"concrete injury fulfilling the requirement of standing" (Matter
of Town of E. Hampton v State of New York, 263 AD2d 94, 96
[1999]; see New York State Assn. of Nurse Anesthetists v Novello,
2 NY3d at 214-215 [2004]; Schulz v Cuomo, 133 AD3d 945, 947
[2015], appeal dismissed 26 NY3d 1139 [2016], lv denied 27 NY3d
907 [2016]). The parties' remaining contentions are rendered
academic by this determination.
McCarthy, Egan Jr., Lynch and Pritzker, JJ., concur.
ORDERED that the judgment is affirmed, without costs.
ENTER:
Robert D. Mayberger
Clerk of the Court

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State of New York

Supreme Court, Appellate Division

In the Matter of BRENNAN

NEW YORK STATE BOARD OF

Calendar Date: January 12, 2018

Emery Celli Brinckerhoff & Abady LLP, New York City

William J. McCann Jr., New York State Board of Elections,

Sinnreich, Kosakoff & Messina, LLP, Central Islip (John

Appeal from a judgment of the Supreme Court (Fisher, J.),

The background of this matter is more fully discussed in

In April 2015, one of respondent's commissioners made a

To establish standing to pursue this litigation,

Is., Inc. v New York State Dept. of Envtl. Conservation, 23 NY3d

The six individual petitioners are current or former

To confer standing, a claimed injury may not depend upon

respondent had granted the motion, the resulting opinion might

McCarthy, Egan Jr., Lynch and Pritzker, JJ., concur.

ORDERED that the judgment is affirmed, without costs.

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