TITLE OF BILL:
to amend the public authorities law, in relation to the ownership status
of transit facilities
PURPOSE OR GENERAL IDEA OF BILL:
This bill would correct an unintended loophole in current law which
allows a small group of MTA New York City Transit (NYCT) employees to
recover from their employer in tort for personal injuries for which
they have already been fully compensated by workers' compensation
This loophole undermines the basic premise of the workers'
SUMMARY OF PROVISIONS:
This bill amends the public Authorities Law ("PAL") to expressly
provide that NYCT is the owner of all transit facilities in the City
of New York solely for purposes of non-delegable duties of property
owners imposed by state law.
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.,
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:
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.
This act shall take effect immediately.
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