Relates to the ownership status of transit facilities

Justification

Under the PAL provisions creating NYCT, S 1201, ET SEQ Ct, the Legislature authorized the City of New York to convey to NYCT by deed, lease, license, or other arrangement all transit facilities owned and operated, or thereafter acquired or constructed, by the City and/or the Board of Transportation. In connection with such conveyance, NYCT was to assume all legal responsibility therefor, via Agreements of Lease (commonly known as the "Master Leases"). Because the City accomplished this conveyance via the Master Leases, as opposed to deeds, the transit facilities existing at the time of the transfer and those built subsequently with the capital funds (but not these properties financed by MTA or NYCT capital funds) are owned by the City. While the City technically holds title to these facilities, the City retains none of the traditional rights of an owner; NYCT retains jurisdiction, control, possession and supervision of the transit facilities. The City may not even terminate a Lease for so long as any debt of the MTA or NYCT relating to transit facilities remain outstanding. The City has no say over whether, when and where system construction will occur and not power to ensure project safety. Further, the Master Leases provide that NYCT shall indemnify the City for any judgments arising out of ownership and control over property subject to a Master Lease when and if NYCT ceases using a specific piece of property acquired via a Master Lease. Certain state laws, including Labor Law § 240, et seq., place non-delegable duties on property owners absolutely responsible for worker safety in instance involving the performance of certain types of construction work. Labor Law § 240, which is a strict liability statute, is based on the premise that property and that therefore no negligence need be shown to find liability. Further, certain of these state laws, including Labor Law § 240, do not exempt a fee owner from liability even if the property is subject to a net lease and the actual fee owner retains none of the actual indices of ownership application of these statutes to be the unique set of facts created by the City's lease of transit facilities to NYCT that has produced the inequitable circumstance which this legislation seeks to remedy.

Statement in support

This bill will eliminate an unintended loophole which results from the unique circumstances of the city's lease of transit facilities to NYCT combined with the effect of the non-delegable Labor Law provisions and

is expected to save NYCT six million ($6,000,000) dollars and numerous hours of staff time.

In November 1997, the New York State Court of Appeals held in the case of COLEMAN V. CITY OF NEW YORK , 91 N.Y. 2d 821, 689 N.E.2d 523, 666 N.Y.S. 2d 553 (N.Y. 1997), that the City of New York, as fee owner of certain transit facilities, is liable for worker injuries on the premises of such facilities which result from a failure to comply with Labor Law § 240, regardless of whether the City had control over the property at the time of such injuries. In essence, COLEMAN provides that injured transit workers are able to recover twice for a single injury received on the job - first, from NYCT under the Workers' Compensation Law and, second, in tort against the City. Because the Master Leases provide for NYCT indemnification of the City for all damages arising out of NYCT operations, any judgments against the City resulting from a violation of Labor Law § 240 are in fact paid by NYCT. Thus, NYCT ends up paying twice for a single injury.

The Court of Appeals noted in COLEMAN that the "Legislature has, in the past, carved out exceptions from liability for certain owners," and the Court therefore declined to act in place of the Legislature. Rather, the Court concluded that the Legislature could carve out an exception for the City should it choose to and left it up to the Legislature to so act. This bill implements the Court of Appeals' suggestion. In so doing, this bill merely corrects an unintended loophole, which enables workers to receive a double recovery for a single injury at the public's expense.

Prior legislative history

2007: A.560 2005-06: A.756 2003-04: S.5128 2001-02: S.5024 2000-9: S.4487-A

Fiscal implications

As noted, this bill would save NYCT and the City of New York the expense of litigation and will save NYCT millions of dollars in judgments and settlements.

Effective date

This act shall take effect immediately.