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Carver v. Nassau County Interim Finance Authority

United States Court of Appeals, Second Circuit

September 20, 2013

James Carver, as President of the Nassau County Police Benevolent Association, Gary Learned, as President of the Superior Officers Association of Nassau County, Thomas R. Willdigg, as President of the Nassau County Police Department Detectives' Association, Inc., Plaintiffs-Appellees,
v.
Nassau County Interim Finance Authority, Ronald A. Stack, Leonard D. Steinman, Robert A. Wild, Christopher P. Wright, George J. Marlin, Thomas W. Stokes, in their official capacities as directors/members of the Nassau County Interim Finance Authority, Edward Mangano, in his official capacity as County Executive of Nassau County, George Maragos, in his official capacity as Nassau County Comptroller, County of Nassau, Defendants-Appellants

Argued: June 10, 2013

Corrected: September 27, 2013

Appeal from a judgment of the United States District Court for the Eastern District of New York (Wexler, J.), which granted summary judgment to the plaintiffs. Plaintiffs challenged a wage freeze imposed by the Nassau County Interim Finance Authority, asserting that it violated the Contracts Clause, Article I, Section 10 of the Constitution, and that the Authority's power to impose a wage freeze pursuant to N.Y. Pub. Auth. Law § 3669 had expired. The district court granted summary judgment to the plaintiffs based solely on their state law statutory interpretation claim. On appeal, defendants challenged the district court's jurisdiction to reach that claim as well as the merits of its decision. We agree that the district court abused its discretion in exercising pendent jurisdiction over the statutory construction claim.

Alan M. Klinger, Stroock & Stroock & Lavan LLP, New York, NY, Harry Greenberg, Seth H. Greenberg (on the brief), Greenberg Burzichelli Greenberg P.C., Lake Success, NY, for Plaintiffs-Appellees.

Christopher J. Gunther, Skadden, Arps, Slate, Meagher & Flom, New York, NY, for Defendants-Appellants Nassau County Interim Finance Authority, Ronald A. Wild, Christopher P. Wright, George J. Marlin and Thomas W. Stokes, in their official capacities as directors/members of the Nassau County Interim Finance Authority.

MARC S. WENGER (ANA C. SHIELDS, on the brief), Jackson Lewis LLP, Melville, NY, Special Counsel for the County Attorney, for Defendants‐Appellants, Edward Mangano, in his official capacity as County Executive of Nassau County, George Maragos, in his official capacity as Nassau County Comptroller, and County of Nassau.

Howard Wein, Koehler & Isaacs LLP, New York, NY, for Nassau County Sheriff's Correction Officers Benevolent Association as amicus curiae in support of Plaintiffs-Appellees.

Steven A. Crain and Daren J. Rylewicz, (Leslie C. Perrin, of counsel), Civil Service Employees Association, Inc., Albany, NY, for Civil Service Employees Association, Inc., as amicus curiae in support of Plaintiffs-Appellees.

Before Pooler and Carney, Circuit Judges, and Korman, District Judge. [*]

Edward R. Korman, District Judge

Plaintiffs, representatives of various Nassau County police unions, brought suit to contest a wage freeze imposed in 2011 on Nassau County employees, including police officers, by the Nassau Interim Finance Authority ("NIFA"), a public benefit corporation formed by the New York State Legislature in 2000 in response to the County's unstable financial condition. The defendants are NIFA, Nassau County, and various officers of both. The police unions contend that the wage freeze was imposed in violation of the Contracts Clause, Article I, Section 10 of the Constitution, and that the authority conferred on NIFA to impose such a freeze had expired under the terms of the applicable statute, N.Y. Pub. Auth. Law § 3669(3).

The district court granted summary judgment to the police unions on their state law claim without reaching the constitutional question. On appeal, defendants argue that the applicable statute was wrongly construed. They also contend, principally, that the district judge abused his discretion in exercising jurisdiction over the pendent state law claim.

BACKGROUND

The Nassau Interim Finance Authority is a public benefit corporation created by the New York State Legislature in June 2000 in response to the growing financial crisis facing Nassau County. The County, which was $2.7 billion in debt, had been forced to allocate nearly one quarter of its spending to servicing that debt, and the County's debt was downgraded by rating agencies to one level above junk status. The Legislature passed the NIFA Act, creating NIFA as a public benefit corporation to oversee the county's finances. N.Y. Pub. Auth. Law § 3650 et seq. The Act provided that NIFA would be governed by a panel of ...


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