Barbara Connolly, et al., Respondents,v.Long Island Power Authority, et al., Appellants, et al., Defendant.BriefN.Y.January 9, 2018To Be Arg ued By: BRIAN J. SHOOT Time Requested: 30 Minutes AP L-20 16-0020 7 Queens County Clerk:\· Index /1/o. 6341/ 13 Appellate Divis ion, Second Department Docket No. 20J.I-09086 (£ourt of ~pptalS' STATE OF ;\lEW YO RK BARBARA C ONNOLLY ANLJ JA\-IES CON\:OLLY, JAMES 0AIIL AJ\D ROSE DAHL, E LIZABETH DUffY, STEVEN GREE:\BERG AND LUCIA GREE~BERG, DAVID H EGARTY AND REGIJ\A HEGARTY, HELEJ\:E HYLA\10, M ATTHEW LO\IG AND MARY LONG, AUORAY MANI\:11\G A\0 JAMES :YlAN\ 1\JG, M ARl ALLEJ\ M ACK MARTII\0, JAM ES M CCARTNEY AJ\0 MARY MCCARTI\EY, LAWREJ\CE M CGOVERN A"\10 DOROTHY MCG OVER\1, KATHERINE MCLOLGI!I.IN AND MARY R EY:\OLDS, LOUIS N ICOSIA AND CATHERI\IE N ICOSIA, M ICHAEL O ' HAN LO' AI\LJ CATHERJJ\E O'HANLON, LJ~OA STRONG A~O JOH~ STRONG, JOSEPH WALL AND MAliREE\1 SHEA WALL, Plaintijfs-Re.,pondents, LONG l SLAI\D P OWER AUTHOR ITY, L OI\G ISLAND LlGHTI\JG C0\1PA\IY, NATIO"-:AL G RID ELECTRIC SERVICES LLC, and Defendanls-Appellanrs, 2\TATIO\JAL GRID P LC, Defendant. BRIEF FOR PLAINTIFFS-RESPONDENTS qr Counsel: BRI/\~ J. SHOOT ERICK. SCHWARZ Date Completed: March 2, 2017 S ULLIVA\1 PAPAIN BLOCK M CG I{ATH & CANNAVO P.C. A flomeys.for Plaintiffs -Respondents 120 Broadway, 18th Floor New York, New York I 0271 2 12-732-9000 Table Of Contents Preliminary Statement ............................................................................................................ 1 Summary of Argument .......................................................................................................... 3 Issues Presented ..................................................................................................................... 5 Statement of Facts .................................................................................................................. 6 The LIP A Act: A Government Takeover Of A Privately Owned Utility That Was Never Intended To Alter Substantive Tort Liability ......................................................................................................................... 6 LIPA Outsources Day-To-Day Control To A Private Contractor, 'rhe IJresent-Day NGES ............................................................................................ 8 The Moreland Commission: Concluding That LIP A's Outsourcing Of Its Statutory Responsibilities General!J Caused Confusion, Including During The Events Here In Issue ...................................... 9 Despite The Fact That The Service Area Was An Island, LIPA And Its Contractor Fail To Implement A~ry Written Protocols For Flooding ..................................................................................................................... 11 LIP A's Board Convenes As Superstorm Sandy Approaches - But Devotes Only Thirry-Nine Seconds Of The Meeting To The ~i\pproaching Storm .................................................................................................. 13 Appellants' Mythical "Cost-Benefit Analysis" ...................................................... 15 The Aftermath: LIP A's CEO Mistakenly Asserts That LIP A Had De-Energized Its Breezy Point Facilities ............................................................... 16 The IJroceedings Below ....................................................................................................... 1 7 The Appellants' Actual Arguments For Dismissal, Contending That "Operation Of Electrical Power Plants" Was "Governmental" Conduct Imbued With Immunity ............................................ 18 The Connolly Plaintiffs' Actual Arguments In Opposition, Including That The "Provision of Electricity" Has Always Been A "Proprietary" Activity Subject To The Ordinary Rules Of Tort Liability ....................................................................................................................... 19 Supreme Court's Ruling, That Appellants' Arguments For Immunity Were Without Precedent Or Merit ...................................................... 20 The Appellate Division's Affirmance, Rejecting Appellants' Claim That The Very Magnitude Of The Harm They Caused Rendered Their Conduct "Governmental" ............................................................................. 21 POINT I LIABILITY IS IMPOSED UNDER ORDINARY TORT STANDARDS WHERE THE CONDUCT THAT CAUSED THE ALLEGED INJURIES WAS "PROPRIETARY" IN NATURE ................................ 23 POINT II THE CONDUCT IN ISSUE WAS PLAINLY "PROPRIETARY" AND THUS GOVERNED BY THE SAME TORT STANDARDS AS WOULD APPLY TO ANY OTHER UTILITY ............................................................ 25 A. Conduct Is Proprietary When The Governmental Activities In Issue "Essentially Substitute For Or Supplement Traditionally Private Enterprises" ............................................................... 26 B. Operation Of An Electric Utility, Including It Core Function Of Providing Electric Power, Is And Always Has Been A Proprietary Function ....................................................................... 28 C. LIPA's Patently Inapt Case Law Cannot Alter That No Utility Has Ever Before Been Awarded Governmental Function Immunity ....................................................................................... 33 11 D. LIPA's Current Arguments For Immunity Are Patently Inconsistent With This Court's Recent Rulings In Turturro, Wittoif, Applewhite, And World Trade Center ................................................. 36 POINT III APPELLANTS' ARGUl\1ENT THAT THE CONDUCT IN ISSUE WAS AKIN TO A "GOVERNMENTAL" FAILURE TO PROTECT THE PUBLIC FROM "CRIMINALS," "THIRD PERSONS," OR "NATURAL DISASTERS" IS FUNDAMENTALLY FLAWED INASMUCH AS THE "OUTSIDE FORCE" FROM WHICH PLAINTIFFS HEREIN REQUIRED PROTECTION WAS THE APPELLANTS' OWN ELECTRICAL LINES .............................................................. 39 POINT IV LIPA'S ARGUMENT FOR Il\11\IUNITY IS ALSO INCONSISTENT WITH THE PUBLIC SERVICE LAW, THE STATE-APPROVED TARIFF THAT DIRECTLY GOVERNS ITS TORT LIABILITY, AND THE LIPA ACT ITSELF ........................................................................................ 42 A. Inconsistent With The Public Service Law ............................................... .42 B. Inconsistent With LIP A's Own Tariff ...................................................... .46 C. Inconsistent With The LIPA Act ............................................................... .46 POINTY LIPA'S CLAIM THAT ITS THEORIZED GOVERNMENTAL IMMUNITY SHOULD EXTEND TO ITS INVESTOR-OWNED CONTRACTOR FAILS FOR THE ADDITIONAL REASON THAT NEW YORK HAS CONSISTENTLY REJECTED ANY FORM OF GOVERNMENT CONTRACTOR TORT IMl\1UNITY ........................................... 48 lll A. New York Law Has Consistently Rejected Any Form Of Derivative Governmental Contractor Tort Immunity ............................ .48 B. This Court Recently Rejected A :Much More Compelling Argument For Derivative Tort Immunity ................................................. 51 C. Appellants' Irrelevant Precedents - All Three Of Them - Provide No Support For The Contractor Immunity 1\ppellants Seck ....................................................................................... , ..... 52 D. Even If New York Were To Now Adopt The Government Contractor Defense Recognized Under Federal Law, Such Would Not Help NGES In This Case ....................................................... 55 POINT VI APPELLANTS' APPEAL TO "PUBLIC POLICY" TURN ON DEMONSTRABLY FALSE ASSERTIONS .................................................................. 57 1. Appellants' Purported Reluctance To Deprive "Nursing Homes" And "Hospitals" Of Electrical Power ........................................ 58 2. LII:>A's Alleged Obligation To Indemnify Its Contractor ....................... 59 3. Appellants' Fictitious "Catch-22" ............................................................... 61 4. Appellants' Repeated References To The So-Called "Emergency" And To Their "Finite Resources" ...................................... 62 Conclusion ............................................................................................................................ 63 IV Table Of Authorities Table Of Cases Alexander v Eldred, 63 NY2d 460 [1984] ................................................................................................. 24 Altro v Conrail, 130 AD2d 612 [2d Dept 1987], affg 129 Misc2d 1061 [App Term 1985] ......................................... ··········· ......................................................... 52, 54, 55 Applewhite v. Accuhealth, Inc., 21 NY3d 420 [2013] ................................................................... 23n, 26, 27, 28, 33n Arriola v City of New York, 128 AD3d 747 [2d Dept 2015] ............................................................................ 59n Austro v Niagara Mohawk Power Corp., 103 AD2d 903 [3d Dept 1984] revd on other grounds, 66 NY2d 674 [1985] .......................................................................................................................... 30 Balsam v. Delma Eng'g Corp., 90 NY2d 966 [1997] ................................................................................................. 27 Bates v Holbrook, 171 NY 460 [1902] ............................................................................................ 48, 56 Berger v 34th St. Garage, Inc., 3 NY2d 701 [1958] ................................................................................................... 50 Bliss v Vil. of Arcade, 306 AD2d 902 [4th Dept 2003] .............................................................................. 31 Bowen v Niagara Mohawk Power Corp., 183 AD2d 293 [4th Dept 1992] ............................................................................. .43 Braun v Buffalo Gen. Electric Co., 200 NY 484 [1911] ................................................................................................... 30 v Brunero v City of New York Dept. of Parks and Recreation, 121 AD3d 624 pst Dept 2014] ............................................................................ 59n City of New York v Long Is. Power Auth., 14 AD3d 642 [2d Dept 2005] ................................................................................ .45 Clark v City of New York, 130 AD3d 964 [2d Dept 2015] .......................................................................... 49, 56 Cockburn v City of New York, 129 AD3d 895 [2d Dept 2015] .................................................................... 34n, 39n Crown Communication New York, Inc. v Dept. ofTransp. of State, 4 NY3d 159 [2005] ................................................................................................... 52 Cuffy v City of New York, 69 NY2d 255 [1987] .............................................................................................. 33n Drever v State, 134 AD3d 19 [3d Dept 2015] .............................................................................. 35n Ernest v. Red Cr. Cent. School Dist., 93 NY2d 664 [1999] .............................................................................................. 28n Estate of Radvin v City of New York, 119 AD3d 730 [2d Dept 2014] .................................................................... 34n, 39n Filarsky v. Delia, 566 U.S. 377 [2012] ........................................................................................... 52, 54 Flex-0-Vit USA, Inc. v Niagara Mohawk Power Corp., 292 AD2d 764 [4th Dept 2002] .............................................................................. 44 Freeman v City of New York, 111 AD3d 780 [2d Dept 2013] .................................................................... 34n, 39n Friedman v State, 67 NY2d 271 [1986] ................................................................................................. 28 Vl Garricks v. City of New York, 1 NY3d 22 [2003] ..................................................................................................... 39 Green v A.W. Chesterton Co., 366 F Supp 2d 149 [D Me 2005] ............................................................................ 56 H.R. Moch Co. v Rensselaer Water Co., 247 NY 160 [1928] ................................................................................................ 33n Haddock v City of New York, 75 NY2d 478 [1990] ........................................................................................ 25, 35n Harland Enterprises, Inc. v Commander Oil Corp., 64 NY2d 708 [1984] .............................................................................................. 33n Heeran v Long Is. Power Auth., 141 AD3d 561 [2d Dept 2016] ............................................................................... 21 Howard v Finnegans Warehouse Corp., 33 AD2d 1090 [3d Dept 1970] ............................................................................... 50 In re Joint E. and S. Dist. New York Asbestos Litig., 897 F2d 626 [2d Cir 1990] ....................................................................................... 56 In re Signal Intern., LLC, 579 F3d 478 [5th Cir 2009] ..................................................................................... .41 Jewish Home and Infirmary of Rochester, New York v. Comm. of N.Y. State Dept. of Health, 84 NY2d 252 [1994] ................................................................................................. 44 Kadymir v New York City Tr. Auth., 55 AD3d 549 [2d Dept 2008] .............................................................................. 33n Kelleher v Town of Southampton, 306 AD2d 247 [2d Dept 2003] ............................................................................ 34n Kochanski v City of New York, 76 AD3d 1050 [2d Dept 2010] ............................................................................ 34n Vll Kovit v Estate of Hallums, 4 NY 3d 499 [2005] ................................................................................................... 27 Laratro v City of New York, 8 NY 3d 79 [2006] .................................................................................................. 33n Lauer v City of New York, 9 5 NY2d 9 5 [2000] ................................................................................................ 34n Lee v Consol. Edison Co. of New York, 98 Mise 2d 304 [App Term 1978] ........................................................................... 61 Leeds v Metro. Transp. Auth., 117 Mise 2d 329 [App Term 1983] ...................................................................... 35n Matter of In re World Trade Ctr. Bombing Litig., 17 NY3d 428 [2011] ........................................................................... 21, 26, 33n, 36 Matter of City of Rochester, 72 NY2d 338 [1988] ................................................................................................. 53 ·McLean v City of New York, 12 NY 3d 194 [2009] .............................................................................................. 34n Miller v State, 62 NY2d 506 [1984] .................................................................................. 23, 26, 35n Miner v Long Is. Light. Co., 40NY2d372[1976] ................................................................................................. 30 Missano v City of New York, 160 NY 123 (1899] ................................................................................................... 32 Nachamie v. County of Nassau, _ AD3d _, 2017 N.Y. Slip Op. 00657 [2d Dept Feb. 1, 2007] .................. 39 Newman v Consol. Edison Co., Inc., 79 Mise 2d 153 [App Term 1973] .......................................................................... .43 Vlll Oetcrs v City of New York, 270 NY 364 [1936] ................................................................................................... 31 Preston v State, 59 NY2d 997 [1983] ................................................................................................. 24 Price ex rel. Price v New York City Hous. Auth., 92 NY2d 553 [1998] ................................................................................................. 23 Riss v City of New York, 22 NY2d 579 [1968] .......................................................................................... 23,31 Royal Ins. Co. of Am. v RU-VAL Elec. Corp., 918 F Supp 647 [EDNY 1996] ............................................................................... 48 Schremp£ v State, 66 NY2d 289 [1985] ................................................................................................. 24 Sebastian v State, 93 NY2d 790 [1999] ............................................................... 23, 26, 27, 28, 31, 34n Stathakos v Metro. Tr. Auth. Long Is. R.R., 109 AD3d 979 [2d Dept 2013] ............................................................................ 35n Steinberg v New York City Tr. Auth., 88 AD 3d 582 [1st Dept 2011] ................................................................................ .49 Sue/Perior Concrete & Paving, Inc. v Lewiston Golf Course Corp., 24 NY3d 538 [2014] ................................................................................................. 51 Tallarico v Long Is. Light. Co., 45 AD2d 845, 846 [2d Dept 1974] affd, 38 NY2d 733 [1975] ............................. 30 Tango by Tango v Tulevech, 61 NY2d 34 [1983] ................................................................................................ 34n Tara N.P. v. Western Suffolk Board of Co-p Educ. Serv., 2017 N.Y. Slip Op. [Feb. 16, 2017] ........................................................................ 26 IX Trawally v. City of New York, 137 AD2d 492 l1st Dept 2016] ............................................................................ 59n Turner v Degnon McLean Contr. Co., 99 AD 135 [1st Dept 1904] afld sub nom. Turner v Degnon- McLean Contr. Co., 184 NY 525 [1906] .............................................................. .48 Turturro v City of New York, 28 NY3d 469 [2016] ................................................................. 23, 24, 26, 27, 29,37 Valdez v City of New York, 18 NY3d 69 [2011] .......................................................................................... 23, 33n Weiner v Metro. Transp. Auth., 55 NY2d 175 [1982] ........................................................................................ 20, 33n Weiss v Fote, 7 NY2d 579 [1960] .......................................................................................... 24, 28n Weld v Postal Tel. Cable Co., 199 NY 88l1910] ..................................................................................................... 61 Wittorf v City of New York, 23 NY3d 473 [2014] ....................................................................... 24, 26, 27, 28, 37 Zoller v Niagara Mohawk Power Corp., 137 AD2d 947 [3d Dept 1988] ............................................................................... 44 Statutes And Other Authorities 4PT1 Municipal Legal Forms§ 71:50, Nov. 2016 Update ............................................. 59 9 ALR3d 382 [1966], § 5, Right of contractor with federal, state, or !om! public boc!J to latter's immunity from tort liability .................................................................... 50, 56, 60 16 NYCRR 218.1 .......................................................................................................... 42,43 18A McQuillin Mun. Corp.§ 53:127 (3d ed.),July 2016 Update ................................... 32 X 42 U.S.C. § 1983 ..... , ............................................................................................................. 54 53A N.Y. Jur. 2d Energy§ 306 ........................................................................................... 30 L. 1986, c. 517 ......................................................................................................................... 6 Estate of Radvin v City of New York, Brief for Defendants-Appellants., 2013 WL 9839911 ............................................................................................................. 40n Public Authorities Law § 1001 ........................................................................................... 30 Public Authorities Law § 1 020-p ..................................................................................... 31 n Public Authorities Law § 1 020-s ................................................................................. 44, 45 J>ublic Service Law§ 66 ....................................................................................................... 44 Public Service Law§ 66[12] [a] ............................................................................................ 42 Restatement (First) of Agency§ 347 ................................................................................. 50 Xl Preliminary Statement This brief is submitted on behalf of Barbara and James Connolly and twenty- seven other plaintiffs who resided in Breezy Point, Queen until someone's decision not to de-energize an area that was expected to flood caused the neighborhood to become engulfed in flames. To date, no one knows who decided that it was a good idea not to de-energize the area, or whether that person was employed by defendant Long Island Power Authority ("LIPA") or defendant National Grid Electrical Services LLC ("NGES"), the contractor to which LIP A outsourced the entire operation of the utility. Indeed, there is no indication that there actually was a decision, as opposed to inaction by default. What we do know as a result of the Moreland Commission's investigation is that LIPA failed to develop any written protocols as to what was to be done in the event of flooding (R.665). 1 It and contractor NGES also created a "bifurcated LIPA- National Grid" structure that was "simply unworkable in the context of a storm event" (R.661-662). That "simply unworkable" structure- which required NGES's employees to misrepresent themselves as LIP A representatives (R.661) - was not motivated by any attempt to improve service or safety, but was instead intended to enhance LIP A's "brand identity" (R.661). 1 All such references correspond to pages in the Record on Appeal in this case. References that are instead preceded by the letter H refer to the Record in Heeran v. UPA, to which the appellants frequently refer. --- ----------- That is what this case is about. While appellants strive to convey that they are being sued for supposedly difficult decisions that were purportedly made in emergency circumstances, they are being sued because, (a) these utilities that serviced an area that was wholly located on an island failed to implement written protocols for flooding (R.665), (b) then exacerbated that failure by adopting a bifurcated structure - in order to "retain [LIPA's] brand identity with the public" (R.661) - that rendered them incapable of decision-making "in the context of a storm event" (R.661- 662), and, in consequence, (c) failed to de-energize an area that they were repeated!J told would flood. 2 Summary of Argument No utility has ever been granted tort immunity under New York law with respect to any alleged act or omission, let alone with respect to negligence in performing its core function of providing electricity to its customers. Likewise, no private contractor - whether hired to operate ambulances, build highways, or construct a nuclear plant- has ever been granted tort immunity under New York law. The reason why no utility has ever been awarded tort immunity in more than a century of New York jurisprudence that has seen its share of storms and black-outs is that an electric utility's provision of electricity has always been deemed a proprietary function. Further, it is a proprietary function that is governed by special statutory rules of liability that appellants decline to acknowledge. Appellants' unprecedented pleas for immunity should here be rejected, first, because their conduct was "proprietary" under settled common law standards (Points I and II, infra); second, because appellants' argument that they had no duty to protect the plaintiffs from "criminals" or "natural disasters" is inapt in this case in which the claimed damages arise not from the flooding of plaintiffs' homes nor from the acts of some "third person," but instead from fires that were caused by appellants' equipment (Point III, infra); 3 third, because LIP A's arguments for immunity are inconsistent both with the Public Service Law and with the terms of the statutorily approved tariff that specifically governs its tort liability (Point IV, infra); fourth, because there is no such thing as governmental immunity for private contractors under New York law (Point V, infra); and, final!J, because appellants' public policy arguments for immunity rest upon factual assertions that are often not factual (Point VI, infra). 4 Issues Presented 1. Did the lower courts err in ruling that governmental operation of a electrical company is a proprietary activity where, (a) the acts or omissions that give rise to liability concern the utility's core function of providing electric power, and, (b) the utility's tort liability is governed by a statutorily approved tariff that docs not provide or acknowledge governmental immunity? 2. Did the lower courts err in concluding that governmental immunity would not, in any event, inure to the benefit of the utility's investor-owned contractor? The Connolly plaintiffs submit that the correct answer to each question is No. 5 Statement of Facts The LIPA Act: A Government Takeover Of A Privately Owned Utility That Was Never Intended To Alter Substantive Tort Liability Up until 1986, Nassau, Suffolk, and the Rockaway Peninsula were served by the Long Island Lighting Co. ("LILCO") (R.538-551). LILCO was "the largest business on Long Island" with 5,600 employees, "annual revenues exceeding $2 billion," and "a book value of more than $7 billion" (R.615). Like Consolidated Edison Co. ("Con Ed"), Rochester Gas & Electric Co., Niagara Mohawk Power Corporation, Orange and Rockland Utilities, Central Hudson Gas & Electric Corporation, and all of the other major utilities in the State, LILCO was an investor- owned company (R.538). In 1986, the Legislature passed and the first Governor Cuomo signed the "LIPA Act," effecting a government takeover of LILCO. L. 1986, c. 517. The extensive legislative history adduced below (R.315-634) - all by the plaintiffs - shows that the Legislature had two objectives: (1) to wrest control from LILCO, a company widely perceived to have been mismanaged (R.326, 344-346, 387, 388), and, (2) to achieve ratepayer savings (R.241, 245). The Act was opposed by the Energy Association of New York State ("the Energy Association"), an industry group whose members were the seven largest utilities in the State (R. 513-515). LILCO separately opposed the Act on the ground 6 that there was "no precedent whatsoever for a utility takeover of this magnitude anywhere in this country" (R.596). To the present point, while the Act's proponents and detractors debated whether any real savings would be realized, the alleged savings was supposed to come as a result of more favorable tax treatment, better interest rates, and other such factors, not from any theorized reduction in tort liability. The entity which the Governor tasked to study the matter, the Sawhill Panel, concluded that there would likely be "ratepayer savings in the range of 7 to 9 percent" and that those savings "would arise primarily from the absence of Federal income taxes for LIPA, its capital structure that consists of 100 percent debt, and its assumed access to lower interest rate tax-exempt debt" (R.245). The State's Division of the Budget noted that "LIPA could import its fuel tax free and avoid the 2.75 percent petroleum gross receipts tax" (R.484). LIPA would also "not be required to pay sales or use taxes on office and road equipment and supplies ancillary to the utility production generation process" (R.484). No one suggested that the Act would or might reduce the utility's costs 1n compensating its victims for the harm it caused (R.238-492). 7 LIPA Outsources Day-To-Day Control To A Private Contractor, The Present-Day NGES Although created to fulfill the functions previously performed by LILCO, LIPA proceeded to outsource virtually every aspect of its operations (R.662). In 1997, LIPA hired LILCO pursuant to an eight-year Management Services Agreement ("MSA") to operate, maintain and repair its Transmission and Distribution System ("T&D System") (R.657). In 2002, LILCO assigned the MSA to Keyspan Electric Services LLC ("Keyspan") (R.657). In 2006, LIPA and Keyspan extended the MSA for another eight years (R.657). In 2007, Keyspan merged with National Grid US, Inc., with Keyspan being the surviving entity (R.657). On May 1, 2008, Keyspan formally changed its name to National Grid ("NGES") (R.657). Section 6.1 [A] of the MSA provided that Keyspan/NGES's "Minimum Compensation" would start at $224 million per year during the first three years of the contract (2006-2009) and would then increase annually along with the Consumer Price Index (R.111 ). Keyspan/NGES would additionally receive "Variable Compensation" that was premised upon the "total kilowatt hours of LIP A's billed sales" (R.111-112). Thus, the more electricity LIPA transmitted, the more money Keyspan/NGES made (R.111-112). Conversely, ifLIPA and/or NGES cut the power in any neighborhood, such would reduce the number of kilowatts sold, and thus reduce NGES's compensation. 8 According to the Moreland Commission's Interim Report (of which more is said below), LIPA ultimately became little more than a shell that served to conceal contractor NGES. While LIP A retained "various core, non-operative functions" which included the setting of rates (R.659), it was NGES that operated the T&D System (R.658). LIPA even '"contracted out' the emergency planning function subject to certain LIP A approvals ... " (R. 662). By the time of the subject storm, NGES employed "approximately 2,000" people (R.658) who had been instructed to misrepresent themselves as LIPA employees (R. 660-662). 5 ee pages 10 to 11, infra. LIP A itself had only a hundred employees (H.423). The New York Times described LIPA as "akin to a holding company" (H.423), adding that many of its personnel '"had no utility experience or training"' and that "politicians" had turned LIPA into "a rich source of patronage jobs ... " (H.422). The Moreland Commission: Concluding That LIP A's Outsourcing Of Its Statutory Responsibilities Generally Caused Confusion, Including During The Events Here In Issue On November 13, 2012, which was approximately two weeks after the plaintiffs' homes burned to the ground, the second Governor Cuomo established the Moreland Commission on Utility Storm Preparation and Response ("the Commission") to "study, examine, investigate, and review the response, preparation, and management of New York's power utility companies with respect to Hurricanes 9 Irene and Sandy, Tropical Storm Lee ... and other major storms ... " (R.650). The plaintiffs submitted the Commission's "Interim Report" in opposition to the appellants' pre-answer motion to dismiss (R.645-702). The Report was based on interviews with over twenty witnesses, testimony elicited at three public hearings, and review of "thousands of pages of documents" (R.654). The Commission found that LIP A "made every effort" to foster the appearance that it was in charge even though its contractor ran the system (R.661- 662). The deception had nothing to do with any effort to run the utility more safely or efficiently. LIP A insisted on the subterfuge in order to "retain brand identity with the public" (R. 661). The Commission found that LIPA's efforts to enhance "brand identity" included a policy that required any NGES employee who made a media statement to identify himself or herself '"as a LIP A representative"' while making "'no mention of lNGESJ other than as approved by LIPA" (R.661). Some of the other formal company policies that were intended to maximize LIP A's "brand identity" included: "' any lNational Grid] employee representing LIPA on electric business matters will indicate that he or she is a LIPA representative"' (R.661). "'All written correspondence with LIP A's electric customers will be reproduced on LIPA letterhead, without any reference to [National Grid] ... "' (R.661 ). 10 '"Uniforms, hardhats, and foul weather gear worn by [National Grid] employees . . . will contain LIP A's logo, without any reference to [National Grid]"' (R.661 ). The Commission concluded that LIP A's "brand identity" strategy generai!J led to communication breakdowns and confusion (R.664). More critically, the structure was "simply unworkable in the context of a storm event" (R.661-662). That systemic confusion was coupled, the Commission further found, with LIP A's failure to develop any protocols as to what would be done - or not done - in the event of floods (R.665-666). Despite The Fact That The Service Area Was An Island, LIPA And Its Contractor Fail To Implement Any Written Protocols For Flooding Even though LIP A "publically adopted the concept of a storm hardening program and committed to spending $25 million per year for this purpose," it never spent or even budgeted that sum (R.662). Even worse, LIPA and its contractor failed to develop and implement proper storm protocols (R.664). The Commission found that utilities are supposed to have a "utility storm response plan" to serve as the "play book" for what the utility will do in the event of a storm (R.684). That "play book" is supposed to include protocols for de-energizing those areas that are expected to flood (R.665). The purpose of such protocols is "to protect the public from fire and electrical hazards posed by wiring and circuits that may have come into contact with flood water" (R.665). 11 Here, there were no such written protocols for flooding even though, as the Commission caustically observed, the area that LIP A served was "wholly contained on an island, thus making storms a fact of life" (R.665). The Commission additionally found that NGESJs for-profit incentives like!J contributed to the lack of storm preparedness (R.662). Under the contract, NGES's compensation was determined by how many kilowatts it sold (R.111-112). Time and money spent on storm preparation were not rewarded. Further, a "storm event" was enumerated as a "force majeure" event and all performance penalties were suspended during such period (R.662). The Commission thus observed (R.683): Emergency preparedness 1s often not seen as contributing to short-term profitability. To summarize, as of October 2012, the T&D System was operated by NGES employees disguised as LIPA employees (R.661). Those NGES employees lacked written protocols to follow in the event of flooding (R.665-666) and worked for an employer that would do better by not de-energizing areas that were expected to flood (R. 111-112). And then Superstorm Sandy approached. 12 LIP A's Board Convenes As Superstorm Sandy Approaches - But Devotes Only Thirty-Nine Seconds Of The Meeting To The Approaching Storm That Breezy Point flooded on the evening of October 29, 2012 was not a surprise. LIP A and its hiree were repeatedlY told it would flood. Plaintiffs' Amended Verified Complaint alleged that the defendants knew for "[a]t least one year before October 29, 2012" that the City of New York had designated "the neighborhood of Breezy Point" as part of "Zone A," which, by definition, meant that the area had a '"high likelihood of evacuation if a hurricane is expected"' (R.906, ~~ 171-172). According to the Moreland Commission, internal documents showed "that LIPA was well aware of the potential storm surge and flood threat" (R.666). According to a contemporaneous article in the New York Times, LIP A's trustees met "[f]or more than two hours" on October 25, 2012 - four days before the storm surge hit - and "talked about a range of issues, including a proposal to hire a branding consultant" (H.420). They also discussed the approaching storm ... for exactly 39 seconds (H.420). On October 26, 2012 - now three days before the storm hit- Governor Cuomo declared a state of emergency in all of the State's 62 counties by virtue of Sandy's approach, which was then a Category 2 hurricane (R.653). 13 On the morning of October 28, 2012, the National Weather Service National Hurricane Center warned of a "life-threatening storm surge" that could cause "repeated and extended periods of coastal and bayside flooding" (H.426-427). Mayor Bloomberg that same day issued Executive Law No. 163 (H.430), which proclaimed a state of emergency in the City of New York and ordered that "[a]ll members of the public" apart from "authorized government personnel" etc. to evacuate the areas designated as Zone A by 7:00 p.m. as "'anticipated weather conditions"' were "'likely to cause heavy flooding"' and "'power outages"' (R. 906-907, Amended Verified Complaint, ,-r 174; H.430). Despite all of the above, LIPA/NGES never de-energized either the Breezy Point community or the Rockaway Peninsula on which it was located (R.907-908, Amended Verified Complaint, ,-r,-r 180-181). They did not even de-energize or repair those power lines they knew to be down (H.301-317, 520). By contrast, Con Ed, the utility that provided power throughout most of the City of New York, "preemptively shut down power in lower Manhattan and neighborhoods in Brooklyn, including neighborhoods across the water and immediately north of Breezy Point" (R.908-909, Amended Verified Complaint, ,-r 188). On October 29, 2012 at approximately 8:30 p.m., the anticipated storm surge caused multiple short circuits of the still energized power lines, ultimately causing multiple fires (R.910-911, Amended Verified Complaint, ,-r,-r 199, 202). 14 The fires destroyed more than 130 homes (R.911, Amended Verified Complaint, ~ 202). Appellants' Mythical "Cost-Benefit Analysis" One myth amongst the many that permeate appellants' brief is that someone made a "policy-laden," "discretionary," "legislative-executive" decision "not to preemptively black out the Rockaway Peninsula." App. Br. at 3, 10-11, 23, 24, 30, 31, 41, 42. Appellants repeatedly represent that the decision was made by LIP A itself. I d. at 24 (discussing "LIPA's decisions about de-energization"), 30 ("LIPA's decision"), 46-47 (" ... LIP A's decisions not to de-energize the Rockaway Peninsula ... "). Appellants even wax eloquent about how and why "LIP A" made its "policy decision," stating that "the decision" "necessarily required Defendants to weigh the 'fire prevention benefits against the potential public safety hazards"' (App. Br. at 10- 11) and that it entailed "a cost-benefit analysis" (id. at 43, and again at 46-47). The story is constructed from whole cloth. There is no proof that anyone from LIPA or NGES specifically considered de-energizing the power lines in Breezy Point itself or more generally on the Rockaway Peninsula, let alone that he or she conducted some kind of "cost-benefit analysis." Quite the contrary, the proof established that LIPA was so clueless that its Chief Operating Officer afterwards thought that NGES had de-energized Breezy Point (H.647). See pages 16 to 17, infra. 15 LIPA's tales about the "cost-benefit" analysis it performed all stem from an internal email sent from Theodore G. Pappas to Mark Gross. The email, which was sent at 3:33 p.m. on October 28, 2012, stated that LIPA had de-energized Fire Island "as a safety precaution" but that "[a]t this point in time, LIP A has no current plans to de-energize any parts of Long Island other than Fire Island" (H.438). It is the latter part of the statement, namely that LIPA then (i.e., as of October 28th) had no "plans to de-energize any parts of Long Island other than Fire Island," that appellants regard as license for them to represent that, (a) someone at some point specifically considered de-energizing Breezy Point, (b) he, she, or they worked for LIPA rather than NGES, and, (c) he, she, or they performed some sort of "cost-benefit analysis" before deciding not to de-energize Breezy Point. The Aftermath: LIP A's CEO Mistakenly Asserts That LIPA Had De-Energized Its Breezy Point Facilities On November 3, 2012, which was five days after much of Breezy Point went up in flames, LIPA Chief Operating Officer Michael Hervey went on the radio and proclaimed, as follows, that the Rockaway Peninsula had been pre-emptively de- 16 ~--~ --------~ - ----~-~--- energized and that the fires were therefore not caused by "an electric system issue" (H.647): Michael Hervey: Yes, and so I do want to go back to one thing. I appreciate you telling me about the sparking wires, but you also mentioned like the Rockaway's [sic], the electric system was not the cause of the fire in the Rockaway's [sic]. I just want to be clear on that. Our system was de-energized preemptively at the time when the fire started. So, it was not an electrical system 1ssue. Emphasis added. LIP A meanwhile demonstrated its acumen by posting a map on its website that "showed that power had been restored to more customers in Lawrence, in Nassau County" than there were homes in Lawrence (H.422). The Proceedings Below Appellants tell the Court that they moved to dismiss the complaint on the ground that their purported "decision not to preemptively de-energize the Rockaway Peninsula" was a "complex" determination that warranted immunity (App. Br. at 11), that plaintiffs opposed the motion on the "false premise" that LIP A was claiming immunity as to everything it did (id. at 11-12), and that Supreme Court then misapprehended the appellants' argument and ruled "without analysis" that the conduct in issue was proprietary (id. at 14-15). 17 Appellants misrepresent their own argument for dismissal, the plaintiffs' arguments in opposition, and the clearly stated reasons why the motion was denied. The Appellants' Actual Arguments For Dismissal, Contending That "Operation Of Electrical Power Plants" Was "Governmental" Conduct Imbued With Immunity Appellants moved for dismissal on the stated ground that "provision of electrical services" and the "operation of electrical power plants" - not just the hypothesized decision that is here in issue -were "essential governmental functions" as to which the appellants therefore enjoyed absolute immunity (R.140, 157, 164). Appellants argued that the analysis "must begin with the holding of the Appellate Division, Second Department in Koch v Dyson, 85 AD2d 346, 368-369 [2d Dept 1982]" (R.159), a case they no longer cite. Appellants construed the "unqualified holding" of that decision to be that "operation of electrical power plants is a 'public governmental function' [emphasis added]" (R.157). In so positing, appellants pronounced that it was "of little or no legal consequence that one of LIP A's principal roles is as supplier of electric power to its customers" (R.162). Evidently intuiting that the nisi prius court might not agree that "operation of electrical power plants" was a "governmental function," appellants did, to be sure, proclaim, "Nor would the analysis change were the Court to consider the nature of the specific acts upon which the complaint is based in assessing whether a 18 governmental as opposed to proprietary function was involved" (R.159). However, that was appellants' back-up argument, to be reached only if the court somehow failed to comprehend that the "operation of electrical power plants" was historically a "governmental" activity (R.159). The Connolly Plaintiffs' Actual Arguments In Opposition, Including That The "Provision Of Electricity" Has Always Been A "Proprietary" Activity Subject To The Ordinary Rules Of Tort Liability Contrary to what is said in appellants' brief, the Connolly plaintiffs maintained that "THE PROVISION OF ELECTRICITY IS AND ALWAYS HAS BEEN DEEMED 'PROPRIETARY' WITHIN THE MEANING OF THE TORT LAW ... [emphasis added]" (Plaintiffs' Point II at R.780). Plaintiffs further urged that liability was therefore governed by ordinary tort standards in this case in which "the harm was allegedly caused by negligence in the 'supply or use' of electrical power" (R.765). In demonstrating that appellants' motion was meritless, plaintiffs did not address whether LIP A could have successfully claimed immunity if it had a police force or a fire brigade and the case had involved an allegedly negligent failure to prevent a crime or extinguish a fire (R.763-817). The case did not involve any alleged failure to provide police or fire protection. It involved fires that were caused by the appellants' failure to de-energize their own electrical lines. 19 Supreme Court's Ruling, That Appellants' Arguments For Immunity Were Without Precedent Or Merit Contrary to the claims appellants now make on appeal, Justice Siegel did not misunderstand their arguments for pre-answer dismissal. She rejected them, for good reason, in an eight-page ruling (R.9-16). Although appellants proclaimed 1n their movmg papers that "operation of electrical power plants" was a "governmental function" (R.159-160), Supreme Court observed that "traditionally, electricity in New York has been provided by private entities, with public entities like LIPA being the exception rather than the rule" (R.13). Although appellants asked the court to pretend that they were municipalities who were being sued for failure to prevent or control some third person's actions and that the court should simply ignore that it was appellants themselves who owned and operated the electrical lines that ignited the fires (R.161-164), Supreme Court noted that settled law required that it consider "'the capacity in which that act or failure to act occurred"' (R.12, quoting WeinervMetro. Transp. Auth., 55 NY2d 175,182 [1982]). Here, because appellants operated a utility and were being sued for alleged negligence in the supplying of electrical power, "[c]learly, the transmission of electricity by LIPA and National Grid [was] a proprietary act, not governmental, depriving defendants the protection of the cloak of governmental immunity" (R.13). Supreme Court further ruled that LIP A's contractor could not claim immunity even if LIP A were deemed immune inasmuch as "[f]or over 100 years, the well-settled 20 law in this State has been that private contractors that perform work for government entities are liable for their own negligence" (R.15). The Appellate Division's Mfirmance, Rejecting Appellants' Claim That The Very Magnitude Of The Harm They Caused Rendered Their Conduct "Governmental" The Appellate Division majority reasoned that "the governmental function immunity doctrine applies, as its name suggests, only to the actions of a governmental entity that are properly categorized as governmental functions." Heeran v Long Is. Power Auth., 141 AD3d 561, 563-564 [2d Dept 2016]. It here concluded that "[t]he provision of electricity has traditionally been a private enterprise in this State, and the Legislature clearly created LIP A as a public authority to substitute for a private enterprise" (id at 564). In reaching the latter conclusion, the Appellate Division majority specifically addressed the appellants' argument that the fact that the conduct in issue was in response to a "natural disaster" rendered it "governmental," akin to the Port Authority's alleged negligence in failing to prevent a bombing in Matter of In re World Trade Ctr. Bombing Litig., 17 NY3d 428 [2011]. In World Trade Center, the "Port Authority's responsibility in preparing for and responding to a terrorist threat" was "very different from the responsibility of an ordinary property owner to keep property reasonably safe" (141 AD3d at 565). Here, "[b]y contrast, the functions of electric utilities in the ordinary course or providing electricity and in responding adequately to 21 a hurricane [were] both part of the proprietary core functions of [appellants'] business" (id.). 2 As for the fact that the alleged negligence was much broader in scope and therefore caused much more damage than a single downed or insufficiently insulated electrical wire, the Court ruled that "every private electric utility in the region faced the same hurricane" and "[i]t is not simply the size of the task that determines whether an action is governmental or proprietary" (id. at 565-566). Appellants were therefore wrong in positing "that the magnitude of Hurricane Sandy itself shielded the appellants from having to answer in tort for deficiencies in their preparation and response" (id at 566). There was a lone dissenter. As Justice Miller saw it, appellants' failure to develop any protocols as to what to do with its equipment in the event the low-lying service areas flooded was part of responding to "a natural disaster" and was therefore every bit as "governmental" as preventing a terrorist strike (141 AD3d at 572-573). 2 Contrast App. Br. at 15-16, proclaiming that the Appellate Division failed to "reconcile" its so-called "new rule" with World Trade Center. 22 POINT I LIABILITY IS IMPOSED UNDER ORDINARY TORT STANDARDS WHERE THE CONDUCT THAT CAUSED THE ALLEGED INJURIES WAS "PROPRIETARY" IN NATURE. The common-law rule holds that a "governmental entity's conduct may fall along a continuum of responsibility to individuals and society deriving from its governmental and proprietary functions."' Sebastian v State, 93 NY2d 790, 793 [1999], quoting Miller v State, 62 NY2d 506, 511-512 [1984].3 "At one end of the continuum lie purely governmental functions 'undertaken for the protection and safety of the public pursuant to the general police powers."' Sebastian, 93 NY2d at 793, quoting Riss v City ofNew York, 22 NY2d 579, 581 [1968]. If the conduct in issue was "governmental," the governmental entity is immune from liability unless (a) the conduct in issue was "ministerial" and (b) the defendant owed the plaintiff "a special duty ... apart from any duty to the public in general." Valdez v City of New York, 18 NY3d 69, 76-77 [2011]; Turturro v City of New York, 28 NY3d 469, 478-479 [2016]. In contrast, when the governmental entity is sued for alleged negligence in fulfilling a proprietary function, its liability is the same as that of any similarly situated non-governmental entity irrespective of whether the conduct involved operation or maintenance of government-owned buildings (Price ex ref. Price v New York City Hous. 3 However, this Court has sometimes, as in Applewhite v Accuhealth, Inc., 21 NY3d 420, 425 [2013], characterized the distinction as a "dichotomy" rather than a "continuum." 23 Auth., 92 NY2d 553,554 [1998]), operation of a beach or public park (Preston v State, 59 NY2d 997, 998 [1983]), design, operation, or maintenance of public roadways (Wittoif v City of New York, 23 NY3d 473, 479 [2014]), or operation of a mental facility (SchrempfvState, 66 NY2d 289,294 [1985]). Such is so even if the proprietary conduct entailed exercise of "discretion" or "judgment." Turturro, 28 NY3d at 479 ("[t]he governmental function immunity defense has no applicability where the municipality has acted in a proprietary capacity, even if the acts of the municipality may be characterized as discretionary"). By way of illustration, the timing of a City's traffic lights undoubtedly entails judgment, as does the decision of whether a stop sign is required at a given intersection, as does the determination of whether a particular roadway has a "speeding problem." However, those measures all fall within the proprietary function of highway design and may therefore give rise to liability. See, e.g., Weiss v Fote, 7 NY2d 579 [1960] (timing of traffic lights); Alexander v Eldred, 63 NY2d 460 [1984] (failure to post a stop sign); Turturro, 28 NY3d at 479-480 (alleged negligence in failing to properly respond to a known "speeding problem"). For these reasons, even if appellants were correct in contending without record support that they exercised "discretion" in "choosing" not to de-energize an area they were repeatedly told would flood, such would provide no basis for dismissal if, as the lower courts found, the conduct in issue was proprietary in nature. 24 POINT II THE CONDUCT IN ISSUE WAS PLAINLY "PROPRIETARY" AND THUS GOVERNED BY THE SAME TORT STANDARDS AS WOULD APPLY TO ANY OTHER UTILITY. There is no proof that the person or persons who decided not to implement written protocols for flooding, not to de-energize an area that was expected to flood, and not to repair or de-energize lines that were known to be down - this assuming those were conscious decisions - were actually LIPA officers or employees. See pages 15 to 16, above. If it was NGES rather than LIPA that here decided not to de-energize Breezy Point, LIP A could not claim immunity for a so-called discretionary determination as to which it exercised no discretion. Haddock v City of New York, 75 NY2d 478, 485 [1990] ("the difficulty with the City's contention that it is entitled to a cloak of immunity for the discretionary decision to retain Johnson in his status is that there is no evidence that, prior to the rape, the City in fact made any such decision ... [emphasis in original]"). The same conclusion would follow, for the same reasons, if neither entity actually considered the issue and the area was left energized by default. Plaintiffs accordingly assume for the purposes of the argument that now follows that there was a deliberate determination not to de-energize Breezy Point and that it was LIP A itself that decided it was a good idea not to de-energize an area that 25 would soon be flooded. Plaintiffs' point is that LIP A's arguments for immunity would lack merit even with those factual assumptions since, (1) immunity turns on the specific act or omission in issue and "the capacity" in which that act or omission occurred and (2) operation of an electric utility, particularly including its core function of providing electricity, has always been a proprietary activity. A. Conduct Is Proprietary When The Governmental Activities In Issue "Essentially Substitute For Or Supplement Traditionally Private Enterprises." Determination of whether the conduct in issue is "proprietary" or "governmental" turns on "the specific act or omission out of which the injury is claimed to have arisen and the capacity in which that act or failure to act occurred [emphasis added)." Turturro, 28 NY3d at 478, quoting In re World Trade Center Bombing Litigation, 17 NY3d at 447, quoting Miller, 62 NY2d at 513; Wittoif, 23 NY3d at 479 (same). A municipality will be deemed to have been engaged in a governmental function when its acts are "'undertaken for the protection and safety of the public pursuant to the general police powers' [emphasis added)."' Tara N.P. v. Western Sttjjolk Board of Co-p Educ. Serv., 2017 N.Y. Slip Op. [Feb. 16, 2017], quoting Sebastian, 93 NY2d at 793; Wittoif, 23 NY3d at 479 (same); Applewhite, 21 NY3d at 425 [2013) (same). In contrast, "a government entity performs a purely proprietary role when its 'activities essentially substitute for or supplement traditionally private enterprises."' 26 Turturro, 28 NY3d at 477, quoting Sebastian, 93 NY2d at 793; Wittotj, 23 NY3d at 479 (same); Applewhite, 21 NY3d at 425 (same). Thus, while appellants repeatedly proclaim that "the government is always immune" for conduct in "protecting the public safety" irrespective of whether the activities in issue "essentially substitute for or substitute for or supplement private enterprise" and irrespective of whether the activity was performed "pursuant to the general police powers" (e.g., App. Br. at 22), that is not the case. Were that really the rule, municipality liability would effectively cease to exist since everything a municipal entity does is supposed to be for the "public good" even when actually undertaken for other reasons (e.g., preservation of brand identity [R.661]). Further, while appellants do their best to re-frame the rule as one that distinguishes large-scale determinations from small-scale determinations, that argument cannot be reconciled with settled law. By way of example, a single police officer's allegedly negligent direction of traffic on a single occasion is "governmental" because it is part of the traditionally governmental activity of traffic control. Kovit v Estate of Hallums, 4 NY3d 499, 506 [2005]; see also Balsam v. Delma Engg Corp., 90 NY2d 966, 968 [1997]. By comparison, an allegedly negligent failure to install a median barrier on the Tappan Zee Bridge, a project that would entail expenditure of millions of dollars, falls within the ambit of highway design and maintenance, a historically 27 proprietary activity, and is therefore not a determination to which absolute immunity may attach. Friedman v State, 67 NY2d 271, 280 [1986].4 Thus, the question is, at bottom, whether the conduct here in issue -a utility's allegedly negligent failure to de-energize its electrical lines - "essentially substitute[d] for or supplement[ed] traditionally private enterprises." Sebastian, 93 NY2d at 793; Applewhite, 21 NY3d at 428; Wittoif, 23 NY3d at 479. But that, for obvious reasons, is surely not in doubt. B. Operation Of An Electric Utility, Including Its Core Function Of Providing Electric Power, Is And Always Has Been A Proprietary Function. Plaintiffs do not address whether appellants' deployment of their police would be "governmental" if they actually had any police to deploy. Nor do plaintiffs address whether matters would stand differently if the appellants were being blamed for failure to convince or compel some third person to de-energize his or her electrical lines. Nor does the case involve a municipal entity that was not in the business of supplying electricity but did so in order to power its own buildings or to supplement the power obtained from a privately operated utility. We are here concerned with 4 However, the municipal defendant can in that instance claim a "qualified immunity" from liability if it proves that the act or omission in issue was the product of a study in which "a duly authorized public planning body ... entertained and passed on the very same question of risk as would ordinarily go to a jury." Ernest v. &d Cr. Cent. S(hool Dist., 93 NY2d 664 673 [1999], quoting WeiH, 7 NY2d at 588. 28 allegedly negligent provision of electrical power by a governmental entity that was an electrical utility. There is, 1n these circumstances, no doubt that the conduct 1n 1ssue was proprietary under settled standards. First, the provision of electrical power was traditionally performed by private enterprise. Indeed, when LIP A came into being. all of the major utilities in the State were privately owned and operated (R.450-451). LIPA itself displaced a privately owned utility (LILCO). Even at the time of the storm itself, Long Island was "the only region of New York where the main electrical utility [was] run by the government" (H.421). While appellants comically protest that LIPA was the "exclusive provider of electrical power" in its "service area" (App. Br. at 39), one could just as well observe that the City of New York was and is the exclusive provider of roadways within the City's borders ... which does not alter that the City's design and maintenance of those roadways is "proprietary." Tttrturro, 28 NY3d at 479. Similarly, while appellants below urged that "New York State has a long history of public electricity," that "47 municipalities own and operate utilities in New York State," and that "[t]he New York Power Authority has been in existence since the 1930s" (App. Joint App. Div. Reply Br. at 16), such does not alter that municipal provision of electricity is the exception and not the rule. LILCO itself opposed the LIPA takeover on the very ground that "[n]o government entity in New York State 29 has any experience whatsoever in the operation of a sizeable, modern retail electric system [emphasis in original] (R.595). Further, the New York Power Authority, which was created for the purpose of developing New York State's energy resources (Public Authorities Law § 1001), primarily sells electricity to New York's utilities, not to individual consumers. Second, it has been clear since at least 1911 that electric utilities owe a tort duty to exercise reasonable care in performing their core function: the provision of electricity. Miner v Long Is. Light. Co., 40 NY2d 372, 378-379 [1976] ("[t]he affirmative duty of power companies to exercise reasonable care in the operation and maintenance of their power lines is clear"); Braun v Buffalo Gen. Electric Co., 200 NY 484, 492 [1911] (same); 53A N.Y. Jur. 2d Energy § 306 ("An electric company must exercise reasonable care, commensurate with the danger involved in constructing and maintaining the requisite equipment, to safeguard the public from injury and damage"). This equally applies when the utility's negligence consists of jailing to de-energize lines that should have been de-energized. Tallarico v Long Is. Light. Co., 45 AD2d 845, 846 [2d Dept 1974] ciffd, 38 NY2d 733 [1975]; Austro v Niagara Mohawk Power Corp., 103 AD2d 903, 904 [3d Dept 1984] revd on other grounds, 66 NY2d 67 4 [1985]. Further, while the very fact that so much of the State is serviced by privately operated electrical companies renders it difficult to find reported cases that addressed the tort liability of government operated utilities, the rule has been precisely the same 30 in the atypical case involving a government operated utility. Bliss v Vii. of Arcade, 306 AD2d 902, 902-903 [4th Dept 2003] (" ... we note our disagreement with Supreme Court's conclusion that, because defendant was not making a profit, it was not performing a proprietary function when it sold electricity"). Third, while appellants argue that LIPA's conduct should be deemed governmental on the ground that it had governmental powers (App. Br. at 5, 14, 30, 32, 39), every "Authority" has governmental powers, as does every town, village, county and city.5 Likewise, every governmental act should in theory be done for the public good. Yet, even when the government acts as it does for the public good - this as opposed to not developing emergency protocols because they do not contribute to "short-term profitability" (R.685) - that does not render the conduct "governmental" where, as here, the conduct was not undertaken "pursuant to the general police powers." Sebastian, 93 NY2d at 793, quoting Rtss, 22 NY2d at 481. For example, that construction and maintenance of highways benefits the "public health" does not alter that such activities were traditionally performed by private enterprise and are proprietary for purposes of the tort law. Oeters v City of New 5 While appellants repeatedly cite Public Authorities Law § 1 020-p for the proposition that LIP A is to be "regarded as performing an essential governmental function in carrying out the provisions of this title" (App. Br. at 5, 39), the statute has nothing whatsoever to do with tort liability or immunity. It is entitled "Exemption from Taxation" and reflects the legislative intent that the government take-over of LILCO would result in reduced tax liabili!J (R.247, 328, 486, 488). 31 York, 270 NY 364, 368 [1936] ("Although a municipality in cleaning its streets, acts in the interest of public health, nevertheless it discharges a special power which is regarded as proprietary rather than governmental"); Missano v City of New York, 160 NY 123, 129 [1899] ("[tJhe fact that the discharge of this duty might incidentally benefit the public health did not make the acts of the commissioner of street cleaning a public function"). Final!J, New York's rule is not aberrational. "Although a different rule prevails with respect to the maintenance of an electric plant restricted to lighting streets, alleys, public buildings, parks and grounds, it is generally agreed, among those jurisdictions maintaining the distinction between governmental and proprietary functions, that the maintenance and operation of an electric light system by a municipality and the selling of electricity to private consumers is not a governmental activity, but is a proprietary and private right and duty, for the wrongful exercise of which the municipality will be held liable in damages the same as a private corporation or individual exercising like rights, provided power to operate and conduct the plan is conferred upon the municipality by statute or charter, or the act is not otherwise ultra vires [emphasis added)." 18A McQuillin J\1un. Corp.§ 53:127 (3d ed.),July 2016 Update. Appellants' central contention that the conduct in issue was "governmental" has no basis in New York law and is contrary to the majority rule elsewhere. Providing electric power is what utilities do. It is and has always been a proprietary function. 32 C. LIP A's Patently Inapt Case Law Cannot Alter That No Utility Has Ever Before Been Awarded Governmental Function Immunity. Appellants cite 53 cases in their brief to this Court. However, they fail to cite a single case from this or any other jurisdiction in which a municipally-owned utility was awarded governmental immunity with respect to harm caused by its negligent provision of electrical power. More than that, appellants fail to cite a single reported case in which a municipally-owned utility was deemed immune from tort liability with respect to atry act or omission. Unable to cite a single such case, appellants instead rely upon, (a) cases involving alleged tort liability for failures to provide fire or police protection;6 (b) cases that involved alleged negligence relating to provtslon of emergency medical ("911 ") care/ 6 Valde=0 18 NY3d at 75 (where the police failed to protect the plaintiff from her former boyfriend); In re World Trade Ctr. Bombing Litig., 17 NY3d at 448 (failure to prevent a terrorist bombing); Cufi.Y v Ciry of New York, 69 NY2d 255, 258-259 [1987] (police failure to protect the plaintiffs from being assaulted by their tenants); Harland Enterprises, Inc. v Commander Oil Corp., 64 NY2d 708, 709 [1984] (fire department's failure to timely extinguish a fire); Weiner, 55 NY2d at 178 (the Transit Authority's alleged failure "to protect a person on its premises from assault by a third person"); H.R Moch Co. v Rensselaer Water Co., 247 NY 160 [1928] (alleged failure to provide water necessary to extinguish a fire); Kacjymir v New York Ciry Tr. Auth., 55 AD3d 549, 550 [2d Dept 2008] (where NYCTA personnel which included "officers of the New York City Police Department" allegedly acted negligently in "directing passengers to walk along the track bed to the Sheepshead Bay station"). 7 Applewhite, 21 NY3d at 428 (discussed infra); Laratro v Ciry rif New York, 8 NY3d 79, 82 [2006] (where plaintiff claimed "that the City of New York was slow in responding to a 911 call placed by plaintiff's coworker"). 33 (c) three cases, discussed in Point III of this brief, which appellants characterize as holding that municipalities are immune for negligence in failing to reasonably address a "natural disaster" (App. Br. at 35-36) but which in fact involved alleged negligence in failing to enable ambulances to arrive more quickly;8 (d) cases involving such uniquely municipal conduct as a Town's allegedly negligent denial of a homeowner's application to take measures to combat coastal erosion,9 a probation officer's alleged negligence in depriving plaintiff of the custody of his children,10 a City Medical Examiner's allegedly negligent failure to correct an autopsy finding,11 the allegedly negligent registry /licensing of day care providers,12 and alleged negligence in placing the assailant in a facility for juvenile delinquents and thereafter allowing him to escape; 13 8 Cockburn v City ofNew York, 129 AD3d 895, 896-897 [2d Dept 2015]; Estate ofRadvin v City ~f New York, 119 AD3d 730 [2d Dept 2014]; f'reeman v City of New York, 111 AD3d 780 [2d Dept 2013]. 9 Kelleher v Town of Southampton, 306 AD2d 247, 248 [2d Dept 2003]. 10 Tango ry Tango v Tulevech, 61 NY2d 34, 37,42 [1983]. 11 Lauer v City of New York, 95 NY2d 95 [2000]. 12 McLean v City of New York, 12 NY3d 194 [2009]. 13 SebaJtian, 93 NY2d at 794-795; Jee a!Jo Kochanski v City of New York, 76 AD3d 1050, 1051- 1052 [2d Dept 2010] (where "plaintiff claimed that the City of New York was negligent in "placing the three [assailant-youths] in [a] group home"). 34 (e) two cases 1n which this Court rr:jected municipal arguments for immunity;14 (f) two cases, one of which began as a small claims case, that involved claimed breaches of contract;15 and, perhaps most strangely, (g) a case in which a claimant contended that the State of New York violated her right of sepulcher in harvesting her mother's eyes.16 Utilities have existed for well over a century. Although the largest have all been privately owned with the single exception of LIP A, there have been some publicly owned utilities as well. Yet, in all that time there has never been a single instance in which any such entity was awarded governmental immunity. The immunity appellants seek is unprecedented. 14 Miller, 62 NY2d at 513-514 (where "the act complained of under the landlord theory of liability was the failure to lock the outer doors of the dormitory" and not negligence in deployment of police personnel, the alleged breach fell "within the scope of the State's proprietary function as a landlord"); Haddock, 75 NY2d at 485 [1990] (discussed above). 15 Stathakos v Metro. Tr. Auth. Long !J. RR, 109 AD3d 979, 979-980 [2d Dept 2013] (where plaintiff "alleged that his purchase of monthly commutation tickets" from the Long Island Railroad entitled him to '"some sort of refund or credit"' when the railroad "breached" its "contractual obligation" by "suspending or cancelling service on certain days due to severe weather conditions"); Leeds v Metro. Transp. Auth., 117 Mise 2d 329 [App Term 1983] (where plaintiffs sought "a recovery of $15 from defendant New York City Transit Authority" for "persistently late train service and permit[ing] unsanitary, unsafe, and overcrowded conditions"). 16 Drever v State, 134 AD3d 19 [3d Dept 2015]. 35 D. LIPA's Current Arguments For Immunity Are Patently Inconsistent With This Court's Recent Rulings In Turturro, Wittorf, Applewhite, And World Trade Center. Appellants argue that their failure to de-energize their power lines is analogous to the Port Authority's failure to prevent a terrorist bombing in World Trade Center and that the rulings below "cannot be reconciled" with Applewhite. App. Br. at 15-16, 29. However, it is appellants' arguments that are patently inconsistent with the rulings in those cases and also with two recent Court of Appeals' rulings which appellants ignore: Wittoif and Turturro. Although appellants purport to see no distinction between this case and World Trade Center, the majority there reasoned that the Port Authority's failure to prevent the 1993 WTC bombing was "not separable from the Port Authority's provision of security at the WTC" and was instead a "consequence of the Port Authority's mobilization of police resources ... " (17 NY3d at 428, 448). Here, there was no LIPA police force. Nor does the case even remotely involve allocation or mobilization of any "police resources." Similarly, while appellants proclaim that the decisions below cannot be reconciled with Applewhite, the majority ruling therein was expressly premised on, (1) the fact that the individuals whose conduct in issue were front-line responders employed by the fire department who "routinely place[d] their own safety and lives in peril to rescue others," (2) that provision of "[e]mergency medical services" has "widely been considered one of government's critical duties," and (3) and that the 36 privately operated ambulances "provide[d] supplemental support for a critical governmental duty rather than vice versa" (id.) Here, those factors, the factors this Court deemed most important in a case that split the Court 4 to 3, meet their opposites. Provision of electricity has never been deemed a governmental function ("critical" or otherwise), and the individuals claimed to be negligent risked nothing and were well paid for their services. Moreover, appellants' position that it is of "little or no legal consequence" that one of its "principal roles" was "as supplier of electrical power to its customers" (R.162) is manifestly inconsistent with this Court's rulings in Wittoif and Turturro. Both of those decisions held that the distinction between proprietary and governmental activity turns in part on "the capacity in which [the] act or failure to act occurred," with the consequence that the same conduct that would be governmental when performed by police can become proprietary when performed by an individual who generally fulfilled a proprietary function. So, in Wittoif, 23 NY3d 473, the fact that a police officer's failure to warn of an unsafe roadway condition had been deemed governmental in Balsam, 90 NY2d 966 did not alter that the same failing was proprietary when the allegedly negligent individual was a Department of Transportation worker whose "conduct stemmed from the execution of a proprietary duty" (23 NY3d at 481). Again in Turturro, 28 NY3d 469, where plaintiff complained of the City of New York's failure to implement "traffic calming" measures that would reduce the 37 incidence of speeding, the fact that a police failure to take such measures would be "governmental" did not alter that the rule was otherwise when the allegedly negligent persons were Department of Transportation officials charged with safe maintenance of the roadways. Here, as much as appellants may wish to focus on cases that involved alleged negligence on the part of police officers, firefighters, or parole officers, it remains that, (1) the defendants in this case are, respectively, a public-owned utility and the contractor it hired to run the utility, and, (2) the "act or omission" in issue is their failure to de-energize their own power lines. Appellants' argument that the Court should disregard those circumstances is not supported by the rulings in World Trade Center and Applewhite and is patently inconsistent with the Court's rulings in Wittoif and Turturro. 38 POINT III APPELLANTS' ARGUMENT THAT THE CONDUCT IN ISSUE WAS AKIN TO A "GOVERNMENTAL" FAILURE TO PROTECT THE PUBLIC FROM "CRIMINALS," "THIRD PERSONS," OR "NATURAL DISASTERS" IS FUNDAMENTALLY FLAWED INASMUCH AS THE "OUTSIDE FORCE" FROM WHICH PLAINTIFFS HEREIN REQUIRED PROTECTION WAS THE APPELLANTS' OWN ELECTRICAL LINES. Citing the Appellate Division rulings in Cockburn, Radvin and Freeman,17 appellants argue that "the lower courts have consistently afforded governmental immunity for activities to protect the public from natural disasters" (App. Br. at 34- 35) and that the differences between those cases and the case at bar are "superficial" (id. at 33). The argument is fundamentally flawed. In the first place, while the trier of fact can consider the magnitude of the storm in assessing the reasonableness of the municipality's response, municipalities can be held liable in tort for negligent failure to appropriately respond to a storm. Garricks v. Ciry of New York, 1 NY3d 22 [2003 ]; Nachamie v. Counry of Nassau, _ AD 3d _, 2017 N.Y. Slip Op. 00657 [2d Dept Feb. 1, 2007) (county not entitled to government immunity for flooding caused by the combination of a "rain storm" and the County's negligent oversight of the dredging of its own pond). Thus, in Garricks, where "[o]ver 10 inches of snow" fell and the City urged in its defense that "[t)he snow removal district that encompassed the area where plaintiff fell included 308 miles of plow routes and 635 crosswalks" and that it had deployed 17 Cockburn, 129 _AD3d 895; EJtate of&dvin, 119 I\D3d 730; t--;,.eeman, 111 AD3d 780. 39 "all available workers and equipment, including salt spreaders, plows and front-end loaders" (1 NY3d at 25), none of those circumstances "relieveld] the municipality of its obligation to maintain sidewalks in a reasonably safe condition" (id. at 27). While appellants insinuate that the courts in Cockburn, Radvin and Freeman held that the City of New York (the defendant in all three cases) could not be held liable for its allegedly negligent failure to timely remove snow, all three cases were instances in which ambulances were purportedly delayed by reason of the City's failure to timely clear the streets. The dismissals were premised upon the thesis that the provision of emergenry medical services was a "governmental" function. And the City went to great lengths to stress it was not contending that negligent failure to respond to a storm was "governmental," but only that snow removal "for purposes of vehicular access" was a governmental function. 18 18 The City's Reply Brief in E.rtate qf Radvin, 119 AD 3d 730 framed the distinction as follows: While plaintiffs disagree with the City's argument that snow removal for purposes of vehicular access is a governmental function (Plaintiffs' Brief, 15), they support this assertion only by citing case law standing for a proposition defendants do not contest: that when an individual is injured traversing a roadway or sidewalk because of the presence of snow or ice which was not removed within a reasonable time after its accumulation, the municipality can be held to have breached a proprietary duty. Rad1)in, Brief for Defendants-Appellants., 2013 WL 9839911, p. 10. 40 All of that aside, appellants are not here being sued for their failure to protect "the public" either from "criminal activity" or a "natural disaster." There is no claim in this case that appellants were duty bound to build a levee or take some other action to protect their customers from the anticipated flooding. Rather, appellants are being sued for the fires that occurred when the electrical lines they had not bothered to de- energize came in contact with the storm surge. Flood waters. no matter how historic in depth. cannot of themselves cause fires. It was the appellants' electrical lines that caused the fires, fires that then spread unchecked precisely because the residents and firefighters had by then evacuated the area. Appellants themselves were the so-called "third persons" who caused the harm. Accordingly, the better analogy is to that of a crane owner who leaves the crane unattended during the course of a powerful but predicted storm and then argues with the proverbial straightface that he or she owed no duty to protect the "public" from a "natural disaster" and is therefore not responsible for the damage caused when the crane fell. Compare In re Signal Intern., LLC, 579 F3d 478, 483, 490, 493-495 [5th Cir 2009] (where two vessels negligently moored by defendant broke from their moorings during Hurricane Katrina and thereafter "allided with and damaged a bridge ... approximately five miles away," defendant stood liable inasmuch as the consequences in issue were "foreseeable to a reasonable person" even if "the exact allision point" was "undoubtedly 'surprising' to those involved"). 41 POINT IV LIP A'S ARGUMENT FOR IMMUNITY IS ALSO INCONSISTENT WITH THE PUBLIC SERVICE LAW, THE STATE-APPROVED TARIFF THAT DIRECTLY GOVERNS ITS TORT LIABILITY, AND THE LIPAACT ITSELF. That the conduct in issue was clearly proprietary under common-law standards is dispositive. Beyond that, LIP A's argument for immunity is inconsistent with the Public Service Law, inconsistent with the State-approved tariff that actually governs its tort liability, and inconsistent with the LIPA Act. A. Inconsistent With The Public Service Law. Operation of a utility is and has always been a proprietary function. See Point liB, above. Yet, what renders the appellants' argument so bizarre is that while utilities can in certain instances limit their tort liability to harm caused by their "gross negligence" (as opposed to "ordinary negligence"), the appellants were here statutorily barred from doing even that. Public Service Law § 66[12) [a] provided the Public Service Commission ("PSC") with, inter alia, the power to enact rules concerning the tort liability of gas and electric companies. Pursuant to that statutory authority, the PSC enacted 16 NYCRR 218.1, which states: Every gas corporation, electric corporation and gas and electric corporation shall, where necessary, amend its flied tariff schedules by eliminating therefrom: 42 Emphasis added. (a) Provisions attempting to relieve such corporation from liability arising from the gross negligence or willful misconduct of its officers, agents or servants. (b) Provisions limiting the liability of the corporation for damages resulting from its own negligence in connection with the property owned, installed or maintained by a customer or leased by a customer from a third party. (c) Provisions limiting the liability of the company for any damages resulting from the negligence of the company in connection with the supplying or use of electricity or gas or from the presence or operation of the company's structures, equipment, wires, pipes, appliances or devices on the consumer's premises. The interplay of the subsections of 16 NYCRR 218.1 creates a dichotomy that has existed for decades. Where the case does not fall within subsections (b) or (c), the utility can evade liability except for damage caused by its "gross negligence." That includes, most notably, damage (such as food spoilage) caused by an interruption of service. Newman v ConsoL Edison Co., Inc., 79 Mise 2d 153, 154 [App Term 1973) ("ltJhe Public Service Commission has approved this limited exemption from liability" and "since the scope of the exemption is limited to those acts which disrupt the regular supply of service, it does not violate public policy"). Where the act or omission that is claimed to have caused the damage instead falls within the ambit of subsections (b) or (c), the utility cannot exempt itself for liability for its "own negligence." This includes, under subsection (c), those instances in which the damages resulted from "the supplying or usc of electricity or gas." Bowen 43 v Niagara Mohawk Power Corp., 183 AD2d 293, 395-396 [4th Dept 1992], quoting Zoller v Niagara Mohawk PowerCorp., 137 AD2d 947,950 [3d Dept 1988]; Flex-0-Vit USA, Inc. v Niagara Mohawk Power Corp., 292 AD2d 764, 766 [4th Dept 2002]. Appellants' current argument that the courts should accord them immunity for "ordinary negligence" in the supplying of electricity contravenes both the letter and spirit of the above-quoted regulation. Further, while appellants urged that the regulation docs not specifically reference the doctrine of governmental function immunity, the fact that the provision specifically details when utilities can avoid liability for harm caused "in connection with the supplying or use of electricity or gas" gives rise under the maxim of expression unius est exc!sio alterius to the presumption that there was not some other, wholly unmentioned circumstance in which such liability could be avoided. Jewzsh Home and Infirmary of Rochester, New York v. Comm. ofN. Y State Dept. of Health, 84 NY2d 252, 262 [1994]. In the lower court, when compelled to finally address the above-cited provisions, appellants proclaimed in their reply papers that plaintiffs' citation of Public Service Law § 66 was "thoroughly misguided" because Public Authorities Law § 1 020-s "expressly exempted LIP A's operations from any provisions of the Public Service Law relied upon by plaintiffs, and from Public Service Commission regulation" (R.853-854). LIPA did not happen to mention that it had unsuccessfully tried that very argument in the past. 44 Public Authorities Law § 1 020-s provides that, with certain listed exceptions, "[t]he rates, services and practices relating to the electricity generated by facilities owned or operated by [LIPA] shall not be subject to the provisions of the public service law ... " The operative words are "rates, services and practices." The statute does not provide any authorization for LIP A to ignore or re-write the provisions governing its liabilities. And that was the point of the Second Department's ruling in City ofNew York v Long Is. Power Auth., 14 AD3d 642 [2d Dept 2005]. City concerned, ironically, the Rockaway peninsula. Prior to LIP A's acquisition of LILCO's asserts, LILCO's franchises with respect to the peninsula obligated it to reimburse the City of New York for the City's costs in avoiding or restoring the utility's properties when those properties interfered with the City's public works projects. Seeking to evade such payments, LIP A argued that such liability fell into the category of "rates, services and practices" and that it therefore had no obligation to continue making the payments formerly made by LILCO. The Appellate Division ruled otherwise. City ofNew York, 14 AD3d at 643. LIP A's argument that it bears lesser responsibility than Con Ed or any other utility would bear in identical circumstances is thus contrary to statutory law as well as common law. 45 B. Inconsistent With LIP A's Own Tariff. LIP A's own tariff- which is reproduced in the Record only because plaintiffs adduced it- expressly covers "injury, casualty, or damage" arising from "the supply or use of electricity" (R.218). It states that LIP A "shall not be liable for any injury, casualty, or damage that results, in any way" from "the supply or use of electricity ... unless . . . [t]he injuries or damages are the result of the Authority's negligence" (R.218). LIP A's provision is substantially the same as the corresponding "supply or use" provisions in Rochester Gas & Electric's tariff (R.227), Niagara Mohawk's tariff (R.229), Con Ed's tariff (R.231), Orange & Rockland Utility's tariff (R.233), and Central Hudson's tariff (R.237). There is no stated exception for damage caused by negligent failure to appropriately respond to "natural disasters" or for those instances in which LIP A negligently causes a lot of damage. C. Inconsistent With The LIPA Act. In the entire mass of legislative history concerning the LIPA Act (R.493-634) including the Sponsor's Memorandum (R.489-490), the Governor's Signing Memorandum (R.491-492), the Assembly debates (R.315-428), and the Senate debates R.429-475) - there is no indication that mryone intended or expected the Act to impact the utility's tort liability. 46 Nor can one posit that the Legislature did not consider whether or to what extent the government take-over would reduce the utility's costs. One of the chief points of debate was whether the tax benefits and other mechanisms identified in the Sawhill Report would result in the 7% to 9% savings that had there been projected (R.241, 251-255). See pages 6 to 7, above. It is simply unthinkable that such analyses would entail such remote factors as alleged overstatement of the property tax savings on the Shoreham nuclear facility (R.539-540) and possible savings that predecessor LILCO might have realized from avoidance of "recapture of the tax impacts of accelerated depreciation" (R.541) and yet wholly miss the economic impact of reduced tort liability ... if there had ever been any intent to alter or reduce existent tort liability. 47 POINTV LIP A'S CLAIM THAT ITS THEORIZED GOVERNMENTAL IMMUNITY SHOULD EXTEND TO ITS INVESTOR-OWNED CONTRACTOR FAILS FOR THE ADDITIONAL REASON THAT NEW YORK HAS CONSISTENTLY REJECTED ANY FORM OF GOVERNMENT CONTRACTOR TORT IMMUNITY. Given that LIP A itself is not entitled to governmental function immunity for its negligence in providing electrical power (see Points I through IV, above), it follows that LIPA's privately owned contractor is also not entitled to governmental function immunity. Even if LIP A were entitled to governmental function immunity, its privately owned contractor would not be inasmuch as New York has never recognized any form of governmental contractor tort immunity. A. New York Law Has Consistently Rejected Any Form Of Derivative Governmental Contractor Tort Immunity. For more than a hundred years, New York law has held that government contractors are not immune for the "absence of due care or skill in the execution of [their] work." Bates v Holbrook, 171 NY 460, 468 [1902]; Turner v Degnon McLean Contr. Co., 99 AD 135, 136-137 [1st Dept 1904] affd sub nom. Turner v Degnon-McLean Contr. Co., 184 NY 525 [1906]; Royal Ins. Co. of Am. v RU-V AL Elec. Corp., 918 F Supp 647, 659-660 [EDNY 1996] (decided under New York law). 48 Further, while appellants backhandedly dismiss the above-cited cases on the ground the courts there rejected pleas for derivative sovereign tort immunity (App. Br. at 56-57) - this while relying exclusively on cases that had nothing to do with a'!Y kind of tort immunity (App. Br. at 49-53) - the stated rationale of those cases equally applies here. The rule is based on the rationale that a private contractor does not "standO in the same position as would the [municipal hirer] if engaged in the work." Turner, 99 AD at 136-13 7. That reasoning equally applies to claims of governmental function immunity and has been consistently applied to bar private contractors' claims for derivative government function tort immunity. Steinberg v New York City Tr. Auth., 88 AD3d 582, 582 [1st Dept 2011]; Clark v City of New York, 130 AD3d 964 [2d Dept 2015]. Clark, 130 AD3d 964, for example, was a case in which a man who was assaulted in a municipally-owned homeless shelter sued, (a) the municipal defendants who owned and operated the shelter, and, (b) FJC Security Services, Inc., the for- profit contractor the municipal defendants had hired to provide security services. The Appellate Division unanimously ruled that the municipal defendants were entitled to dismissal inasmuch as plaintiffs' claims "implicate[d] a government function" (130 AD3d at 965). However, it further ruled that the security contractor, being a private party, was not immune (id). 49 There is simply no authority in New York law for derivative governmental tort immunity, and every reported case that has addressed the subject has gone the other way. And, once again, the rule that appellants seek to change is not aberrational. "[T]he great weight of authority" nationally is that "a contractor with a body public is not entitled to avail himself of the immunity of the latter from liability for injuries resulting from willful tort or negligence in the performance of public work." Right of contractor with federal, state) or local public boc!J to latter's immuniry from tort liability, 9 ALR3d 382 [1966), § 5 (collecting cases). Unable to cite a single New York case 1n which a private contractor was deemed entitled to governmental tort immunity, appellants turn to agency law and argue that settled "agency principles" hold that "'an agent who is acting within his authority is entitled to the immunities of the principal."' App. Br. at 53-54, quoting Howard v Finnegans Warehouse Corp., 33 AD2d 1090, 1090 [3d Dept 1970]. That argument lacks merit. The principle that appellants mangle comes from section 347 of the Restatement (First) of Agency, which this Court quoted and followed in Ber;ger v 34th St. Garage) Inc., 3 NY2d 701, 703-704 [1958]. That section stated: An agent who is acting in pursuance of his authority has such immunities of the principal as are not personal to the principal. Emphasis added. 50 The point, of course, is that governmental function immunity is "personal to the principal." 1\1oreover, Comment [a] to the cited Restatement provision specifical!J noted that government immunity was personal to the sovereign and therefore did not pass to its agent. The settled tort rule and appellants' agency cases thus lead to the same destination. There is no such thing as derivative governmental tort immunity under New York law or, for that matter, in any other jurisdiction that follows section 347 of the Restatement (First) of Agency. B. This Court Recently Rejected A Much More Compelling Argument For Derivative Tort Immunity. The appellants' argument for derivative governmental immunity is inconsistent with this Court's recent rejection in Sue/Perior Concrete & Paving, Inc. v Lewiston Go!f Course Corp., 24 NY3d 538 [2014] of a much more compelling argument for derivative tort immunity. The Seneca Nation of Indians ("the Nation") is a federally recognized Indian tribe which therefore enjoys sovereign immunity. The question presented in Sue/Perior was whether the entity it assigned "to develop, finance, operate and conduct the business of an 18-hole golf course" (24 NY3d at 542) was also entitled to immunity where that entity was a "wholly owned subsidiary" of the Tribe (24 NY3d at 541). 51 Notwithstanding that the Nation would enjoy sovereign immunity if it had personally developed and operated the golf course, and notwithstanding the subsidiary "exist[ed] solely for the economic benefit of the Tribe and its members" (24 NY3d at 552, Dissent), a divided Court held that the Tribe's immunity did not extend to its wholly owned subsidiary. Here, NGES was not a wholly owned subsidiary of LIPA. It was simply an arm's-length contractor that was paid very well (R.111) but which saw no particular reason, according to the Moreland Commission, to engage in "[e]mergency preparedness" that did not contribute to "short-term profitability" (R.683). C. Appellants' Irrelevant Precedents - All Three Of Them - Provide No Support For The Contractor Immunity Appellants Seek. Aside from their ultimately unfortunate resort to agency principles (see pages 50 to 51, above), appellants cite three cases for their assertion that LIP A's alleged immunity passes to its wholly independent contractor: Crown Communication New York, Inc. v Dept. ofTransp. of State, 4 NY3d 159 [2005], Filarsky v. Delia, 566 U.S. 377 [2012], and Altro v Conrail, 130 AD2d 612 [2d Dept 1987], affg 129 Misc2d 1061 [App Term 1985]. None of those decisions supports appellants' arguments. This Court's ruling in Crown Communications had nothing to do with tort liability, let alone with immunity from tort liability. It was a zoning dispute. The State wanted to build two telecommunications towers that would have been barred by local zoning 52 regulations absent an exemption. The City of New Rochelle did not want them built. As per the now settled rule in such disputes, the Court applied "a balancing of public interests" (id. at 165-166) and concluded over a three-judge dissent that the "numerous benefits" that would arise from construction of the towers outweighed the locality's interests in blocking construction. In the part of the opinion on which appellants now focus, the Court ruled that the exemption should extend to privately owned antennae as well as the state-owned antennae (id. at 167-168). Appellants argue that the issue in Crown Communications is "analogous" to that herein (while, according to appellants, the many decisions that actua!!J involved claims of derivative tort immunity are not at all analogous). App. Br. at 52-53. In fact, this Court has specifically stated that such disputes between or amongst municipal entities are not analogous to issues of tort immunity. This Court's ruling in Crown Communications followed its decision in Matter of City of Rochester, 72 NY2d 338 [1988]. That was the case in which this Court first adopted the balancing test it applied in Crown Communications. Prior to the ruling in Rochester, the question of whether a municipal entity was exempt from zoning requirements turned on whether the intended use of the property was "governmental" or "proprietary." Rochester, 72 NY2d at 341. The Rochester Court unanimous!J rf!jected that distinction "borrowed from the field of tort liability" (72 NY2d at 341) on the very ground that the entire "governmental-proprietary distinction" made no sense as a means of resolving disputes between governmental entities (72 NY2d at 341-343). 53 Thus, appellants' one purportedly supportive Court of Appeals case 1s not merely a case that had nothing at all to do with tort liability or tort immunity. It is a case governed by a standard that was expressly premised on rf!Jection of the entire governmental-proprietary distinction that governs the tort liability of municipal entities. By contrast, Filarsky, 566 U.S. 377 had nothing to do with a'!Y area of New York law. The Supreme Court there held that a private investigator who was hired by a City to perform investigative work enjoyed the same "qualified immunity" as the City itself with respect to a 42 U.S.C. § 1983 claim brought by the individual who was being investigated. Ignoring for the moment that this case is not governed by federal law, the "qualified immunity" that was at issue in Filarsky was not an immunity from suit. It was the immunity that applies where the conduct in issue was not so clearly unlawful at the time it occurred "that defendants would have known that their actions were unlawful." Filarsky, 566 U.S. at 382-383. Nor does Altro, 130 AD2d 612 provide any support for appellants' claim of tort immunity inasmuch as, amongst other reasons, it was not even an action in tort. In Altro, the plaintiff-commuters sued the MTA and its contractor "to recover damages for breach of contract of carriage," alleging that "there were an inadequate number of seats, trains were delayed, air conditioning was not functioning, there were insufficient ventilation and poor lighting, and there were unsanitary conditions." 130 54 AD2d 612. Even in that context, the grant of immunity was specifically premised upon factors that are neither proven nor even claimed to exist here, including that, (1) the "MTA [was] entitled to any profit made by Penn Central and [was] also responsible for any deficits sustained" (Altro, 129 Misc2d at 1061), and, (2) the claimed damages grew "out of an alleged failure to allocate sufficient resources to the maintenance and supply of railroad cars on the Harlem line," which was "not a matter within the control of the defendant but [was] subject to control by the MT A" (Altro, 130 AD2d 612).19 Thus, of the appellants' three purportedly supportive cases, two (the ones decided under New York law) did not involve tort liability and none provides any support for appellants' current argument that a contractor that was earning more than $200 million a year should be imbued with governmental immunity. D. Even If New York Were To Now Adopt The Government Contractor Defense Recognized Under Federal Law, Such Would Not Help NGES In This Case. As has already been shown, New York, like most jurisdictions, does not recogruze and has never recognized derivative governmental tort immunity for 19 The latter factor- that the matter for which the contractor was sued was not within its control - is a critical element of the government contractor defense recognized by federal law. See Point VD, infra. 55 municipal contractors. Bates, 171 NY at 468; Clark, 130 AD3d at 965; 9 ALR 3d 382 at § 5. While federal common law does recognize a governmental contractor defense, that would not aid appellants under the facts of this case even if the Court were to here apply the federal rule. Under federal law, the government contractor must show more than that the conduct in issue was performed pursuant to a contract with a governmental entity. The defense is, as the Second Circuit put it, a "made me do it" defense. The private entity seeking the protection of the defense must show it was directed to perform the act or omission for which it was sued. In re Joint E. and S. Dis!. New York Asbestos Litzg., 897 F2d 626, 632 (2d Cir 1990] ("Stripped to its essentials," to assert the "military contractor defense" is to claim, "'The Government made me do it"'); Green v A. W Chesterton Co., 366 F Supp 2d 149, 157 [D Me 2005] (where the defendant- contractor failed to prove that the Navy had specifically required defendant to use asbestos). Here, we have the very antithesis of the facts needed to establish a government contractor defense inasmuch as it was NGES personnel that actually operated LIP A's T&D System . . . albeit while falsely identifying themselves as LIP A representatives (R. 661-662). 56 POINT VI APPELLANTS' APPEALS TO "PUBLIC POLICY" TURN ON DEMONSTRABLY FALSE ASSERTIONS. The government commission tasked to investigate the LIP A debacle attributed the disaster to, amongst other factors, appellants' "lack of accountability" (R.650) and "lack of incentive" to develop an "[e]mergency preparedness" plan that would not contribute "to short-term profitability" (R.683). Appellants nonetheless devote much of their brief to the thesis that "public policy" dictates that they should henceforth be even less accountable for the harm they negligently cause. The problem with appellants' protestations concerning "public policy" is that they are based upon a host of factual assertions that range from "merely" unproven to simply untrue. One of the appellants' principal factual claims - namely, that LIPA itself decided not to de-energize Breezy Point and/ or the Rockaway Peninsula and did so only after conducting a cost-benefit analysis (App. Br. at 10-11, 43, 46-47) - has already been addressed and debunked. See pages 15 to 16, above. Some of the appellants' other factual inventions are exposed below. 57 1. Appellants' Purported Reluctance To Deprive "Nursing Homes" And "Hospitals" Of Electrical Power. Appellants repeatedly state that hospitals, nursing homes, elevators, and "[v]ital communications systems" were dependent on electrical power. They insinuate that the purported decision not to de-energize Breezy Point - made by some unidentified person at some unidentified time- was motivated by appellants' purported concerns about those facilities. App. Br. 7-8, 23. Even apart from the fact there is actually no proof as to who made the call or that he or she considered anything more than the fact that NGES would lose money by de-energizing Breezy Point, the entire argument rests on the false premise that it was actual!J possible to continue to power the area's nursing homes, hospitals, and "[v]ital communications systems" during the course of the storm. Plaintiffs would ask the Court to take judicial notice that it is pf!Jsical!J impossible for electrical power stations to continue to power areas that are submerged under a storm surge. This is why the .Moreland Commission deemed the power outages "inevitable" (R.664). Indeed, 90% of all of appellants' approximately 1.1 million customers lost power because of the storm (R.421). Thus, the electrical power LIP A provided to Breezy Point would be cut whether or not LIP A de-energized its lines. The only real choice was whether the area should be intentionally de-energized or whether LIPA and its contractor should instead allow their lines to short-out. One course would inevitably cause fires; the other would not. 58 To the extent appellants contend otherwise, plaintiffs would ask the Court to accept that no nursing home or other such facility was made better or safer by virtue of being burned to the ground. 2. LIP A's Alleged Obligation To Indemnify Its Contractor. Searching for some reason why a for-profit contractor that was being paid hundreds of millions of dollars each year should be imbued with governmental immunity, appellants tell the Court that the governing contract required LIP A to indemnify NGES and that LIPA's ratepayers would be "ultimately financially responsible" for any liability imposed on NGES. App. Br. at 52. The argument is doubly flawed. Most every other municipal entity that hires a contractor to perform some function requires the contractor to indemnify it for any liability arising from the contractor's negligence.20 There is even a convenient legal form that municipalities can utilize to that end. 4PT1 Municipal Legal Forms§ 71:50, Nov. 2016 Update. Even if LIPA had here decided to instead give NGES a sweetheart deal in which it agreed to hold NGES harmless in addition to paying it more than $200 million a year plus an added bounty for each kilowatt it sold, LIP A's assent to such a one- 20 E.g., Trawai!J v. Ciry of New York, 137 AD2d 492, 492-493 [1st Dept 2016] (contract concerning maintenance of traffic lights); Arriola v Ciry of New York, 128 AD3d 747, 748 [2d Dept 2015] (contract concerning City-owned construction site); Brunero v Ciry ~~New York Dept. of Parks and Recreation, 121 AD3d 624 [1st Dept 2014] (contract concerning maintenance of City park). 59 sided bargain would not constitute a reasonable or logical reason to upend a long- settled tort rule that also happens to be followed by the "great majority" of jurisdictions nationally. 9 ALR3d 382 at § 5. That aside, while appellants tell the Court that the MSA required LIP A to "indemnify NGES for negligence in the operation of the T&D System" (App. Br. at 52), the factual assertion is itself a half-truth. Section 9.3(B) of the MSA provided that "to the extent permitted by law, [lJPA] will protect, indemnify and hold harmless the Manager [Keyspan/NGES] and its Affiliates" as to, inter alia, "any matter for which LIP A is responsible under Section 6.11 hereof'' (R.133). But that same section further provided that "LIPA shall not, however, be required to reimburse or indemnify any Manager Indemnified Party" for, inter alia, "negligence or other wrongful conduct of any Manager Indemnified Party judicially determined to be responsible for or contributing to the Loss-and-Expense." l\1eanwhile, section 9.3(A) of the MSA stated that "the Manager" (i.e., NGES) would "protect, indemnify and hold harmless LIPA ... [as to] any person, or loss or damage to property arising out of any matter for which the Manager is responsible under Section 6.11 hereof'' (R.132). The referenced section 6.11 provided, in essence, that "the l\1anager shall be responsible and liable to LIP A" for any loss or expense due to "any gross negligence or willful misconduct by the Manager" or "due to any violation of or failure of compliance with Applicable Law" that materially and 60 adversely affected "the condition or operations of the T&D System" or "the financial condition of LIP A" (R.11 7 -118). Thus, the reality is that LIPA could be obligated to indemnify NGES but could instead be entitled to indemnification from NGES, all dependent on whether there was "gross negligence" or a qualifying violation of "Applicable Law" (R.11 7 -118). That appellants see fit to reduce all of this to the factual pronouncement that LIPA was required to indemnify NGES for any liability it might incur speaks for itself. 3. Appellants' Fictitious "Catch-22." Appellants argue that it "takes little effort to imagine a plaintiff suing LIPA for harm caused as a result of any one of the dangers that necessarily occur by deliberately cutting off vital electrical service to a heavily populated region" and that allowance of liability herein would place them in a "Catch-22" situation in which any decision they made would lead to liability. Id. at 44-45. LIP A's "Tariff for Electric Service" specifically exempts it for liability arising from "interruption of service" occasioned by "ordinary negligence" (R.218, ~ IC7(a)(2)). The settled law, which appellants affirmatively used to their advantage in obtaining dismissal of a Sandy-related claim for interruption of service (R.635-644), is that utilities stand liable for interruption of service only when guilty of "gross negligence" or "willful misconduct." Lee v Consol. Edison Co. of New York, 98 Mise 2d 304, 306 [App Term 1978]; cf. Weld v Postal Tel. Cable Co., 199 NY 88, 98 [1910]. 61 Very simply, there is no "Catch-22." 4. Appellants' Repeated References To The So-Called "Emergency" And To Their "Finite Resources." Appellants repeatedly urge that the decisions 1n 1ssue were made in "emergency" circumstances (App. Br. at 37-38, 40, 41) and were in some respect shaped by LIP A's "finite resources" (Id. at 41, also at 2, 3, 42-44). The claims are indefensible. In the first place, the entire point of having written protocols for flooding is to avoid having to "invent the wheel" when the inevitable happens and an area that had been designated as Zone A (i.e., most likely to flood) eventually does flood. That aside, the storm surge did not hit until October 29, 2012 at approximately 8:30 p.m. (R.56-57). The Moreland Commission found that LIPA knew at least four dqys in advance that flooding was likely (R.666). Breezy Point was evacuated by 7:00 p.m. on October 28, 2012, which was more than 24 hours before the storm surge hit (R.52-53). LIP A and its contractor were surely capable of performing an act at some point during that 24-hour span that would have taken a single employee less than five minutes to complete and would be done remotely, without any risk to any LIPA or N G ES employee. 62 Conclusion For the reasons stated above, the order below should be affirmed. Dated: Of Counsel New York, New York March 2, 2017 By: Brian J. Shoot Eric K. Schwarz B ·an ho SULLIV A 1 PAPAIN BLOCK MCGRATH &CANNAVO Attorneys for the Connolly Plaintiffs- Respondents 120 Broadway New York, New York 1027 1 (212) 732-9000 bshoot@triallawl.com 63 CERTIFICATE OF COMPLIANCE The undersigned attorney hereby certifies, pursuant to 22 NYCRR 500.13(c), that the foregoing brief was prepared on a computer using Microsoft Word as following: The typeface (font) is Garamond -- a proportional serif font. The point size is 14 for the text, and 13 for the footnotes. Line Spacing: Double Word Count. The total number of words in this brief, inclusive of point headings and footnotes and exclusive of pages containing the table of contents, table of citations, proof of service and this Statement is 13,989 according to the word- processing software used to prepare the brief. Dated: New York, New York March 2, 2017 By: Respectfully submitted, SUI J ..IV AN PAPAIN BLOCK MCGRATH & CANNAVO Attorneys fo.t.-Pi:aiiififfs-Respondcnts Connolly 0'/~z ~ - Z / Brian J. Shoot 120 Broadway New York, New York 10271 (212)732-9000