William Heeran,, et al., Respondents,v.Long Island Power Authority (LIPA), et al., Appellants, et al., Defendants.

Brief

N.Y.January 9, 2018

JOINT BRIEF FOR DEFENDANTS-APPELLANTS LONG ISLAND POWER AUTHORITY AND NATIONAL GRID ELECTRIC SERVICES LLC I/S/H/A KEYSPAN ELECTRIC SERVICES, LLC LAZER, APTHEKER, ROSELLA & YEDID, P.C. Attorneys for Defendant-Appellant Long Island Power Authority 225 Old Country Road Melville, New York 11747 631-761-0800 HAMMILL, O’BRIEN, CROUTIER, DEMPSEY, PENDER & KOEHLER, P.C. Attorneys for Defendant-Appellant National Grid Electric Services LLC i/s/h/a Keyspan Electric Services, LLC 6851 Jericho Turnpike, Suite 250 P.O. Box 1306 Syosset, New York 11791 516-746-0707 APL-2016-00205 Queens County Clerk’s Index No. 702558/13 Appellate Division, Second Department Docket No. 2014-07622 Court of Appeals STATE OF NEW YORK WILLIAM HEERAN, individually and on behalf of HARBOR LIGHT ENTERPRISES CORP. and HARBOR LIGHT PUB CAFÉ, INC., HANNAH J. SWEENEY, CHRISTOPHER BAMBURY, JAMES BARNES, SHAMUS BARNES, CLIFFORD F. & MAUREEN BAUMANN, WILLIAM & MARY BAYER, DEBORAH BLAIR, REGINA SHANNON BODNAR, ALVINA C. BOUGHAL, EILEEN BRAITHWAITE, CATHERINE R. BRENNAN, SINEAD MCSTRAVOG BROGAN, JAMES BUNYAN, KIERAN BURKE, MARY CASTELLANO, ILENE CAVAGNUOLO, GEORGE CLARK, Individually and on behalf of 114-04 ROCKAWAY BEACH BLVD., LLC, DENNIS COOK, EILEEN P. DEERING, ALLEGRA DENGLER, MAUREEN A. DENNELLY, JAMES J. DOYLE, LUCILLE DWYER, SHIELA DURANTI, RICHARD EARLY, SR., FRANK E. FARRELL, (Additional Caption on the Reverse) >> >> Date Completed: January 19, 2017 To Be Argued By: David Lazer Time Requested: 30 Minutes KATHLEEN FITZSIMMONS, FORTUNATO PETER & VALERIE FOTI, KATHERINE GALLAGHER, JUDITH GANUN, TIMOTHY GANUN, HELEN GRAHAM, JEANNETTE DONNELLY GRIFFENKRANZ, ALDIS HAGEN, HELEN HAMMILL, THOMAS HAMMILL, BRUCE HANNAWAY, SUZANNE HASSELMAN, ANNE HESLIN & MARY HESLIN REED, ELAINE FERRARA HETZEL, KATHLEEN HINCHCLIFF, GERARD JORDAN, JAMES & PATRICIA KANE, JEANNE MARIE KEANE, ARTHUR KEAR, WILLIAM KEATING, WILLIAM J. KEATING, Individually and on behalf of EAST MEETS WEST SUPERB CHINESE FOOD, INC., RONALD KRISCHE, EILEEN LAGAN, KATHLEEN LAHEY, BRIAN & TRACY LANG, PATRICIA LANG, VICTOR & PATRICIA LAPLACE, PHILIP & DEBRA LIVOTI, MARIE LOPRESTI, MARIE A. LOPRESTI, JOSEPH LUDOVICO, BERNICE LUHRS, KATHLEEN LUX, RICHARD MAHON, RAYMOND MARTEN, JOHN MATHIS, STEPHEN MCDADE, MARY MCDERMOTT, JEAN MCDONALD, JAMES E. MCGOVERN, MARTIN J. MCGOWAN, CHARLES MCLOUGHLIN, MARTHA MILITANO, GEORGE F. MILLER, DANIEL J. MORAN, MEGAN & JOSEPH MORAN, ELIZABETH MORGAN, JOHN C. MORRIS, PATRICK MULLANEY, JOSEPH NAPOLI, MARK NEGRELLI, JOHN NELSON, RITA NUSSBAUM, ELIZABETH O’GRADY, DONALD OLSEN, PATRICIA A. PINTO, JEANINE POGGIOLI, MARIE POTTER, MICHAEL & NOREEN QUINN, DOROTHY RAFFO, DEAN RASINYA, MAUREEN REGAN, ROBERT R. REILLY, RICHARD & TRICIA ROJAS, THOMAS ROM, MICHAEL RUDOLPH, ROSEMARY RUSSO, MICHAEL SACCO, LOUIS SCHERIFF & MARGARET MCHUGH, JOHN SCHRETZMAYER, EDWARD SCOTT, ROBERT SOMERVILLE, ROBERT STEVER, MARY SUTERA, ELENA TASSO, PATRICIA A. TIETJEN, CHRISTINE M. TKACH, as Executrix of the Estate of GEORGE TKACH, deceased, JOHN TRAN on behalf of THE JOHN JOSEPH TRAN AND JACQUELINE MICHELLE TRAN JOINT LIVING TRUST, RAYMOND A. VANCE, SAMUEL VIVINO, MARY WELSOME, ROLAND W. WERTZ, LORRAINE WIPPER, RONALD WOHL, THOMAS WOODS and BREEZY POINT COOPERATIVE, INC., Plaintiffs-Respondents, against LONG ISLAND POWER AUTHORITY (LIPA), KEYSPAN ELECTRIC SERVICES, LLC, Defendants-Appellants, and NATIONAL GRID PLC a/k/a NATIONAL GRID US8, INC., NATIONAL GRID USA, INC., and KEYSPAN ENERGY TRADING SERVICES, LLC, d/b/a NATIONAL GRID, Defendants. i RULE 500.1(F) CORPORATE DISCLOSURE STATEMENT 1. Pursuant to 22 NYCRR § 500.1(f), the parents, subsidiaries and affiliates of Appellant National Grid Electrical Services, LLC are listed below: Beegas Nominees Limited National Grid Property Holdings Limited Birch Sites Limited Carbon Sentinel Limited National Grid Property (Northfleet) Limited KeySpan (U.K.) National Grid Seventeen Limited Landranch Limited National Grid Smart Limited Lattice Group Employee Benefit Trust Limited National Grid Ten Lattice Group plc National Grid Thirty Eight Limited Lattice Group Trustees Limited National Grid Thirty Five Limited National Grid Thirty Four Limited National Grid Thirty Limited Natgrid Limited National Grid Thirty Seven Limited NatGrid One Limited National Grid Thirty Six Limited NatgridTW1 Limited National Grid (US) Holdings Limited National Grid Twelve Limited National Grid (US) Investments 2 Limited National Grid Twenty Eight Limited National Grid (US) Investments 4 Limited National Grid (US) Partner 1 Limited National Grid Twenty Seven Limited National Grid Belgium Limited National Grid Twenty Three Limited National Grid Blue Power Limited National Grid Twenty-Five Limited National Grid Carbon Limited ii National Grid UK Limited National Grid Commercial Holdings Limited National Grid UK Pension Services Limited National Grid Viking Link Limited National Grid William Limited National Grid Electricity Group Trustee Limited National Grid Electricity Transmission plc NG Nominees Limited National Grid Energy Metering Limited NGC Employee Shares Trustee Limited NGG Finance plc National Grid Four Limited National Grid Fourteen Limited National Grid Gas Finance (No 1) plc Ngrid Intellectual Property Limited National Grid Gas Holdings Limited NGT Telecom No. 1 Limited National Grid Gas plc NGT Two Limited National Grid Grain LNG Limited Port Greenwich Limited National Grid Holdings Limited Stargas Nominees Limited National Grid Holdings One plc Supergrid Electricity Limited National Grid IFA 2 Limited Supergrid Energy Transmission Limited National Grid Interconnector Holdings Limited Supergrid Limited National Grid Interconnectors Limited National Grid International Limited Thamesport Interchange Limited The National Grid Group Quest Trustee Company Limited National Grid Metering Limited The National Grid YouPlan Trustee Limited Transco Limited National Grid North Sea Link Limited Xoserve Limited National Grid Offshore Limited Boston Gas Company iii British Transco Capital Inc. British Transco Finance, Inc. Broken Bridge Corp. Colonial Gas Company EUA Energy Investment Corporation GridAmerica Holdings Inc. Grid NY LLC KeySpan CI Midstream Limited KeySpan Corporation KeySpan Energy Corporation KeySpan Energy Services Inc. KeySpan Gas East Corporation KeySpan International Corporation KeySpan MHK, Inc. KeySpan Midstream, Inc. KeySpan Plumbing Solutions, Inc. KSI Contracting, LLC KSI Electrical, LLC KSI Mechanical, LLC Land Management & Development, Inc. Landwest, Inc. Massachusetts Electric Company Metro Energy L.L.C. Metrowest Realty LLC Mystic Steamship Corporation Nantucket Electric Company National Grid Algonquin LLC National Grid Development Holdings Corp. National Grid Electric Services LLC National Grid Energy Management LLC National Grid Energy Services LLC National Grid Energy Trading Services LLC National Grid Engineering & Survey Inc. National Grid Generation LLC National Grid Generation Ventures LLC National Grid Glenwood Energy Center LLC National Grid IGTS Corp. National Grid Insurance USA Ltd National Grid Islander East Pipeline LLC National Grid LNG GP LLC iv National Grid LNG LLC National Grid LNG LP LLC National Grid Millennium LLC National Grid NE Holdings 2 LLC National Grid North America Inc. National Grid North East Ventures Inc. National Grid Port Jefferson Energy Center LLC National Grid Services, Inc. National Grid Technologies Inc. National Grid Transmission Services Corporation National Grid US LLC National Grid US 6 LLC National Grid USA National Grid USA Service Company, Inc. Nees Energy, Inc. New England Electric Transmission Corporation New England Energy Incorporated New England Hydro Finance Company, Inc. New England Hydro-Transmission Corporation New England Hydro-Transmission Electric Company, Inc. New England Power Company Newport America Corporation NGNE LLC Niagara Mohawk Energy, Inc. Niagara Mohawk Holdings, Inc. Niagara Mohawk Power Corporation NM Properties, Inc. North East Transmission Co., Inc. Opinac North America, Inc. Philadelphia Coke Co., Inc. Port of the Islands North LLC The Brooklyn Union Gas Company The Narragansett Electric Company Transgas Inc. Upper Hudson Development Inc. Valley Appliance and Merchandising Company Wayfinder Group, Inc. National Grid Australia Pty Limited Keyspan Energy Development Co. British Transco Finance (No 1) Limited v British Transco Finance (No 2) Limited Keyspan C.I. II Ltd Keyspan C.I. Ltd NGT Five Limited NGT Four Limited Inversiones ABC Limitada SCC Uno S.A. Lattice Telecom Finance (No 1) Limited National Grid (IOM) UK Ltd National Grid Insurance Company (Isle of Man) Limited NGT Holding Company (Isle of Man) Limited National Grid Jersey Investments Limited NG Jersey Limited British Transco International Finance B.V. National Grid Holdings B.V. National Grid (Ireland) 1 National Grid (Ireland) 2 National Grid Insurance Company (Ireland) Designated Activity Company BritNed Development Limited Clean Energy Generation LLC Joint Radio Company Limited Island Park Energy Center LLC Nemo Link Limited Islander East Pipeline Company, L.L.C. NGET/SPT Upgrades Limited LI Energy Storage System, LLC St William Homes LLP LI Solar Generation LLC Algonquin Gas Transmission LLC Coreso SA Clean Line Energy Partners LLC Connecticut Yankee Atomic Power Company Direct Global Power, Inc. Energis plc Energy Impact Fund LP Maine Yankee Atomic Power Company Millennium Pipeline Company LLC New York Transco LLC Nysearch RMLD LLC vi Yankee Atomic Electric Company 2. The remaining appellant is a governmental entity and is not subject to 22 NYCRR § 500.1(f). vii TABLE OF CONTENTS Page RULE 500.1(F) CORPORATE DISCLOSURE STATEMENT ..................... i TABLE OF AUTHORITIES .......................................................................... x PRELIMINARY STATEMENT .................................................................... 1 QUESTION PRESENTED ............................................................................. 4 FACTUAL AND PROCEDURAL BACKGROUND ................................... 5 A. Background ........................................................................... 5 1. LIPA and NGES ............................................................ 5 2. Superstorm Sandy .......................................................... 6 B. The Original Complaint ........................................................ 8 C. Defendants’ Motion to Dismiss .......................................... 10 D. Plaintiffs’ Opposition .......................................................... 11 1. The Amended Complaint ............................................ 11 2. Plaintiffs’ Arguments in Opposition ........................... 12 E. Supreme Court Decision ..................................................... 13 F. Appellate Division Decision ............................................... 15 G. Appellate Division Motion for Leave to Appeal ................ 17 viii ARGUMENT ................................................................................................ 18 POINT I ......................................................................................................... 18 LIPA EXERCISED A GOVERNMENTAL FUNCTION WHEN IT DECIDED NOT TO PREEMPTIVELY DE-ENERGIZE THE ROCKAWAY PENINSULA IN ANTICIPATION OF SUPERSTORM SANDY ........................................................................................ 18 A. Legal Principles ................................................................... 18 B. The Allegations Regarding Preemptive De- Energization Of The Rockaway Peninsula Implicate LIPA’s Governmental Responsibility To Protect The Public As A Whole .............................................................. 21 C. The Actions Of Private Utilities Cannot Change The Character Of LIPA’s Governmental Decisions Regarding De-Energization ................................................. 27 D. Protecting The Public From Natural Disasters And Criminal Activity Are Both Governmental Functions ........ 33 E. Plaintiffs’ Additional Allegations Implicate A Governmental Function ....................................................... 37 F. LIPA’s Entitlement To Governmental Immunity In This Case Furthers The Purpose Of The Doctrine .............. 41 POINT II ....................................................................................................... 45 THE AMENDED COMPLAINT FAILS TO ALLEGE FACTS THAT, IF PROVEN, WOULD ESTABLISH AN EXCEPTION TO THE GOVERNMENTAL FUNCTION IMMUNITY DOCTRINE ...................................... 45 A. General Legal Principles ..................................................... 45 B. The Nature Of The Decision Not To De-Energize The Rockaway Peninsula Is Discretionary, Not Ministerial ...... 46 ix POINT III ...................................................................................................... 49 NGES, AS AN ENTITY IN CONTRACT WITH LIPA, PERFORMED A GOVERNMENTAL FUNCTION IN PREPARING FOR AND RESPONDING TO SUPERSTORM SANDY ............................................................. 49 A. Legal Principles ................................................................... 49 B. NGES Is Entitled To The Same Immunity As LIPA When It Performs Governmental Functions ....................... 51 C. Plaintiffs Mistakenly Relied Upon Inapplicable Case Law Addressing Nuisances And Trespass .......................... 56 CONCLUSION ............................................................................................. 60 CERTIFICATE OF COMPLIANCE ............................................................ 62 x TABLE OF AUTHORITIES Page(s) Cases Altro v Consolidated Rail Corp., 130 AD2d 612 (2d Dept 1987) ............................................................... 49, 50, 51 Applewhite v Accuhealth, Inc., 21 NY3d 420 (2013) ....................................................................................passim Bates v Holbrook, 171 NY 460 (1902) ................................................................................. 14, 56, 58 Benner v. Atlantic Dredging Co., 134 NY 156 (1892) ............................................................................................. 59 Berger v 34th St. Garage, Inc., 3 NY2d 701 (1958) ............................................................................................. 53 Bliss v Village of Arcade, 306 AD2d 902 (4th Dept 2003) .......................................................................... 39 Braun v Buffalo Gen. Electric Co., 200 NY 484 (1911) ............................................................................................. 26 Brown v State of New York, 89 NY2d 172 (1996) ..................................................................................... 56, 57 Byrnes v City of Cohoes, 67 NY 204 (1876) ............................................................................................... 59 Cassell v Babcock & Wilcox Co., 186 AD2d 1000 (4th Dept 1992) ........................................................................ 57 Citizens for an Orderly Energy Policy v Cuomo, 78 NY2d 398 (1991) ............................................................................................. 5 Cockburn v City of New York, 129 AD3d 895 (2d Dept 2015) ........................................................................... 35 xi Crown Communication New York, Inc. v Dept. of Transp. of State of NY, 4 NY3d 159, cert. denied, 546 US 815 (2005) ............................................. 52, 53 Cuffy v City of New York, 69 NY2d 255 (1987) ........................................................................................... 19 Drever v State of New York, 134 AD3d 19 (3d Dept 2015) ............................................................................. 32 Filarsky v Delia, 132 US 377 (2012) ............................................................................ 49, 50, 51, 53 Freeman v City of New York, 111 AD3d 780 (2d Dept 2013) ..................................................................... 35, 40 H.R. Moch Co. v Rensselaer Water Co., 247 NY 160 (1928) ............................................................................................. 19 Haddock v City of New York, 75 NY2d 478 (1990) ....................................................................................passim Harland Enters., Inc. v Commander Oil Corp., 64 NY2d 708 (1984) ............................................................................... 19, 22, 34 Herman v City of Buffalo, 214 NY 316 (1915) ....................................................................................... 58, 60 Howard v Finnegans Warehouse Corp., 33 AD2d 1090 (3d Dept 1970) ............................................................... 53, 54, 55 Isbrandtsen Co. v Lenaghan, 128 F.Supp. 662 (S.D.N.Y. 1954) ...................................................................... 55 Kadymir v New York City Tr. Auth., 55 AD3d 549 (2d Dept 2008) ....................................................................... 35, 36 Matter of Karedes v Colella, 100 NY2d 45 (2003) ........................................................................................... 32 Kelleher v Town of Southampton, 306 AD2d 247 (2003) ......................................................................................... 36 xii Kochanski v City of New York, 76 AD3d 1050 (2d Dept 2010) ........................................................................... 32 Laratro v City of New York, 8 NY3d 79 (2006) ........................................................................................passim Lauer v City of New York, 95 NY2d 95 (2000) ........................................................................... 19, 45, 46, 47 Leeds v Metropolitan Transp. Auth., 117 Misc.2d 329 (1983) ...................................................................................... 36 Mairs v Manhattan Real Estate Ass’n, 89 NY 498 (1882) ......................................................................................... 56, 59 McLean v. City of New York, 12 NY3d 194 (2009) ............................................................................... 36, 45, 46 Miller v State of New York, 62 NY2d 506 (1984) ....................................................................................passim Miner v Long Is. Light. Co., 40 NY2d 372 (1976) ........................................................................................... 26 Mohammed v D.H. Farney Contractors, 881 F.Supp 110 (S.D.N.Y. 1995) ....................................................................... 55 Pelaez v Seide, 2 NY3d 186 (2004) ............................................................................................. 46 Estate of Radvin v City of New York, 119 AD3d 730 (2d Dept 2014) ............................................................... 35, 39, 40 Ramme v Long Island R. Co., 226 NY 327 (1919) ................................................................................. 14, 56, 57 Riss v City of New York, 22 NY2d 579 (1986) ....................................................................................passim Schrempf v State of New York, 66 NY2d 289 (1985) ........................................................................................... 39 xiii Sebastian v State of New York, 93 NY2d 790 (1999) ....................................................................................passim Seifert v City of Brooklyn, 101 NY 136 (1886) ............................................................................................. 58 Spano v Perini Corp., 25 NY2d 11 (1969) ............................................................................................. 56 St. Peter v Denison, 58 NY 416 (1874) ............................................................................................... 58 Stathakos v Metropolitan Tr. Auth. Long Is. R.R., 109 AD3d 979 (2d Dept 2013) ..................................................................... 35, 36 Suffolk County v Long Is. Power Auth., 258 AD2d 226 (2d Dep’t 1999), appeal denied, 94 NY2d 759 (2000) .................................................................................................................... 6 Tango v Tulevech, 61 NY2d 34 (1983) ................................................................................. 45, 46, 48 Turner v Degnon McLean Contracting Co., 99 AD 135 (1st Dep’t 1904), aff’d 184 NY 525 (1906) ................... 14, 56, 57, 58 Turner v Degnon McLean Contracting Co., 99 AD135, 137 (1st Dept 1904) ......................................................................... 56 Turturro v City of New York, __ NY3d __, 2016 N.Y. LEXIS 3895, 2016 WL 7389237 (Dec. 22, 2016) ................................................................................................................... 34 Valdez v City of New York, 18 NY3d 69 (2011) ................................................................................. 18, 32, 36 Weiner v Metropolitan Transp. Auth., 55 NY2d 175 (1982) ....................................................................................passim Matter of World Trade Center Bombing Litigation (17 NY3d 428 (2011), cert. denied, 133 S. Ct. 133 (2012)) ........................passim xiv Statutes LIPA Reform Act, L. 2013, ch. 173 ........................................................................ 31 Public Authorities Law §§ 1020-a ............................................................................. 5 Public Authorities Law §1020-i(2) ...................................................................... 5, 14 Public Authorities Law § 1020-x ............................................................................. 31 Public Authorities Law § 1020-a ......................................................................... 5, 39 Public Authorities Law §§ 1020-b(17) .................................................................... 32 Public Authorities Law § 1020-c ............................................................. 5, 30, 32, 39 Public Authorities Law § 1020-cc ........................................................................... 31 Public Authorities Law § 1020-p (1) ................................................................... 5, 39 Public Officers Law, Article 6 ................................................................................. 30 1 PRELIMINARY STATEMENT Plaintiffs commenced this action against the Long Island Power Authority (“LIPA”) and National Grid Electric Services, LLC (“NGES”) (collectively “Defendants”), among other entities, to recover damages allegedly arising from fires that broke out on the Rockaway Peninsula during Superstorm Sandy on the evening of October 29, 2012. This is one of 10 related actions, involving 203 plaintiffs, in addition to 94 subrogation claims, all claiming that Defendants were negligent in failing to preemptively de-energize electric service on the Rockaway peninsula. Defendants moved to dismiss the complaint because the allegations implicate Defendants’ governmental duty to protect the public health and safety. Defendants submit this brief in support of their appeal from an order of the Appellate Division, Second Department which, with one Justice dissenting, affirmed the order Supreme Court, Queens County (Seigal, J.) denying the motion to dismiss. Two of these other actions, Baumann and Connolly, are on appeal before this Court. The gravamen of the complaint is that Defendants failed to protect the public by deciding not to intentionally black out the Rockaway Peninsula before Superstorm Sandy struck Long Island with unprecedented force. Protecting the public health and safety is an action historically undertaken by the government as part of its duty to society as a whole and is a governmental function. LIPA is 2 immune from liability for the consequences of its decisions about whether public safety would be enhanced or compromised by cutting off electrical power to large portions of its service area before an historic “Superstorm.” Contrary to the Appellate Division order, the fact that private utilities may also have considered whether to preemptively de-energize portions of their systems carries no legal significance. This Court has made it clear that governments are entitled to immunity even when private entities face the same risk. Moreover, LIPA is uniquely accountable to the public in a way that private utilities are not, and affording LIPA immunity does not provide it with an unfair advantage in the marketplace, which is an important reason the government is subject to ordinary tort liability for its proprietary activities. Protecting the public from criminals and natural disasters are both governmental functions because they derive from the government’s duty to society as a whole. All such activities require government resources to protect the public safety. Liability for these activities imperil the public fisc and influence legislative-executive decision making in precisely the same way. The amended complaint’s additional allegations that LIPA failed to repair downed power lines during Superstorm Sandy stand in stark contrast to the mere provision of electricity and maintenance of power lines on a “blue sky” day. LIPA’s alleged failure to protect the public from the effects of a "Superstorm" by 3 choosing not to repair power lines during a storm is a governmental function because the allegation is a direct challenge to the manner in which LIPA allocates its resources. In short, the amended complaint alleges that LIPA failed to protect the public by making the discretionary decision not to preemptively de-energize the Rockaway Peninsula (or anywhere else in its service area except for the sparsely populated and isolated Fire Island) before Superstorm Sandy. Because that decision implicates a governmental responsibility, LIPA is immune from liability. NGES is also immune from liability because LIPA contracted NGES to carry out its governmental duties: managing and running Long Island’s electrical system on a daily, indeed minute-by-minute, basis. Affording LIPA governmental immunity without also affording NGES governmental immunity would defeat the purpose of granting immunity for governmental functions. 4 QUESTION PRESENTED Did Defendants Exercise a Governmental Function When They Decided not to Preemptively De-energize the Rockaway Peninsula in Advance of Superstorm Sandy? This question should be answered in the Affirmative. 5 FACTUAL AND PROCEDURAL BACKGROUND A. Background 1. LIPA and NGES In 1986, the Legislature created LIPA, “a publicly owned power authority” that would function as “a political subdivision of the state.” Public Authorities Law §§ 1020-a, 1020-c. LIPA was created to provide “a safer, more efficient, reliable and economical supply of electric energy” in the service area of the Long Island Lighting Company (LILCO).1 Public Authorities Law § 1020-a; see Citizens for an Orderly Energy Policy v Cuomo, 78 NY2d 398, 414 (1991). At the time, “escalating and excessive costs of electricity” in the area served by LILCO, then a privately-owned entity,2 caused a lack of confidence in LILCO’s ability to supply electricity “in a reliable, efficient and economic manner.” Public Authorities Law § 1020-a. In effectuating these purposes, the Legislature determined that LIPA would be performing an “essential governmental function.” Public Authorities Law § 1020-p (1); see Public Authorities Law § 1020-c (stating that LIPA “exercise(es) essential governmental and public powers”). 1 The service area includes all of Suffolk and Nassau counties and the Rockaway peninsula in Queens County. 2 As a result of LIPA’s acquisition of LILCO’s electric utility system in May 1998 LILCO is today a wholly-owned subsidiary of LIPA entitled by statute to “all the privileges, immunities, tax exemptions and exemptions of the authority.” Public Authorities Law §1020-i(2). 6 In March 1997, LIPA acquired LILCO’s electric transmission and distribution facilities and retail operations (T&D system). See Suffolk County v Long Is. Power Auth., 258 AD2d 226 (2d Dep’t 1999), appeal denied, 94 NY2d 759 (2000). The T&D system consists of the equipment necessary to bring power onto Long Island from high-load power lines and deliver it to individual customers. In June 1997, LIPA entered into a Management Services Agreement (MSA) with LILCO, which later assigned the MSA to Keyspan Energy Trading Services LLC (Keyspan). NGES acquired Keyspan and assumed the responsibilities of the MSA (R.331).3 The MSA governed the relationship between LIPA and NGES at the time of Superstorm Sandy.4 2. Superstorm Sandy In October 2012, an historic storm, known as Superstorm Sandy, struck the east coast of the United States and the New York metro area with unprecedented force. Superstorm Sandy, which measured over 1,000 miles across, caused approximately 8.5 million power outages across 21 states – the highest outage total ever – including 2.2 million power outages in New York State alone. Approximately 90% of LIPA’s 1.1 million customers lost power. Superstorm Sandy caused unprecedented damage to LIPA’s T&D system and resulted in 3 “R.__” refers to the Joint Record on Appeal. 4 As noted above, what was in 1997 then known as LILCO is now a wholly-owned subsidiary of LIPA and the entity that managed the electric utility system for LIPA in 2012 is known as NGES. 7 approximately 40,000 separate damage locations across LIPA’s service territory, nearly twice the number of damage locations caused 14 months earlier by Tropical Storm Irene. Prior to the storm, on October 27, 2012, Suffolk County ordered a complete evacuation of Fire Island, Long Island’s barrier island (R.447). LIPA coordinated with Suffolk County and did not de-energize Fire Island until it was notified by a Suffolk County representative that the County had fully executed the evacuation (id.). By approximately 2 p.m. on October 28, 2012, LIPA de-energized Fire Island, similar to how Fire Island was evacuated and de-energized before Hurricane Irene in 2011 (id., and R.441). No other area of the LIPA service territory was de-energized and, in fact, on that same day LIPA put the following message on its website and on Twitter: County and town officials have ordered a mandatory evacuation of Fire Island and as a safety precaution LIPA has de-energized the area. At this point in time, LIPA has no current plans to de-energize any parts of Long Island other than Fire Island (R.438) On October 28, 2012, two days after Governor Cuomo issued a disaster declaration in advance of Sandy (R.432-433), Mayor Bloomberg ordered an evacuation of Zone A in New York City for all “members of the public” by 7 p.m. (R.430). Zone A includes the Rockaway Peninsula (R.505). Unlike Suffolk County’s evacuation order, the Mayor's order did not require “authorized 8 government personnel and essential emergency personnel, and patients and residents of hospitals, nursing homes and senior homes” to evacuate Zone A (R.430). Unlike Fire Island, a narrow barrier island that is a low-rise summer beach resort community with few year-round residents and virtually no automobile roadways, the Rockaway Peninsula is heavily populated year-round, has numerous paved highways and transit infrastructure, and many high-rise structures with elevators, hospitals, nursing homes and senior homes that had not been evacuated. Plaintiffs have not alleged, and the record does not contain, any evidence that any municipality requested the de-energization of any part of LIPA’s service area, except for Suffolk County’s request to de-energize Fire Island. As the storm neared New York on October 29, 2012, the storm surge devastated the region. High winds caused damage to homes and property across the region. At the storm’s peak, electric service to millions of customers was interrupted. The loss of power impacted the provision of healthcare, telecommunications services, subway and rail services, potable water, sewage treatment, and the operation and distribution of gasoline and diesel fuel. B. The Original Complaint After the storm, 131 plaintiffs commenced this action to recover monetary damages for fire damage that allegedly occurred because LIPA failed to preemptively de-energize the Rockaway Peninsula in advance of the storm. 9 According to the original complaint (R.35-51), “fires originated at (the plaintiffs’) respective premises as a result of heat from electrical arcing caused by flooding contacting electrical transmission lines that had been left in service and electrified by Defendants” (¶58). The complaint further alleges that “prior to (the) flooding, the Mayor of the City of New York had ordered the Rockaway Peninsula...to be evacuated and, as a result, neither the plaintiffs nor the Fire Department of the City of New York were capable of extinguishing said fires and, as a result, the properties of the plaintiffs burned to total destruction and devastation” (¶59). Based upon these allegations, plaintiffs asserted causes of action for (1) negligence, (2) gross negligence and (3) “reliance” (R.60-80). Plaintiffs alleged that Defendants had a duty “to establish an emergency response plan in a reasonably prudent manner” (¶60) and that such a plan should have included a plan “to de-energize the Rockaway Peninsula including the plaintiffs’ premises” (¶62). The complaint alleged that Defendants failed to de-energize the Rockaway Peninsula, even though “Defendants knew that the Peninsula was mandatorily evacuated and that it was foreseeable that failing to de-energize would cause fire and electrical hazards posed by wiring and circuits coming into contact with flood water” (¶64). As a consequence of Defendants’ failure to de-energize, plaintiffs allegedly suffered fire damage to their property (¶¶59, 66). According to the complaint, Defendants breached a duty to protect the public by failing to de- 10 energize the Rockaway Peninsula “after the Evacuation Order...had been issued and prior to the historic flooding on the night of October 29, 2012” (R.47). There is no allegation that the Peninsula or any of its communities were, in fact, fully evacuated. C. Defendants’ Motion to Dismiss Defendants jointly moved to dismiss the complaint for failure to state a cause of action on the grounds that Defendants’ decision not to preemptively de- energize the Rockaway Peninsula in advance of an unprecedented storm was immune from liability under the governmental function immunity doctrine (R.32 at ¶ 4). The gravamen of the complaint is that LIPA, in deciding not to de-energize the Rockaway Peninsula, was negligent in failing to protect the Rockaway Peninsula including plaintiffs’ various communities from fire (See Amended Complaint, ¶¶196-198, R.208-209). Defendants emphasized that the decision necessarily required Defendants to weigh the “fire prevention benefits against the potential public safety hazards of preemptively depriving tens of thousands of residents of electrical power” (R.143). This decision is one of the “complex measures of safety and security” that have traditionally been considered governmental functions that are immune from tort liability (R.143-145). Finally, Defendants argued that, by the terms of the complaint, the decision was 11 discretionary (R.151-153), and the complaint did not contain any allegations from which a fact-finder could infer a special relationship between Defendants and plaintiffs (R.154-158). Defendants also argued that NGES, as LIPA’s agent that managed the electrical system, is entitled to the same immunity for governmental functions as LIPA. Accordingly, Defendants urged the court to dismiss the complaint in its entirety as to the moving Defendants (R.159-163). D. Plaintiffs’ Opposition Plaintiffs opposed the motion (R.266-527), annexing an amended complaint and nearly a dozen exhibits, including a newspaper article, various e-mails from LIPA, the Moreland Commission Interim Report, the Mayor’s Evacuation Order, and LIPA’s Tariff for Electrical Service. 1. The Amended Complaint The factual allegations in the amended complaint (R.166-265), filed ten days after -- and manifestly in reaction to -- the dismissal motion, were essentially the same as in the original complaint, except the amended complaint included additional allegations regarding downed power lines and added one new plaintiff. The amended complaint alleged that “Defendants....were on notice on October 29, 2012, that prior to 7:00 p.m. and as early as 10:10 a.m. on the said date of arcing and downed electrical lines in Breezy Point, Rockaway Beach, Belle Harbor and 12 Rockaway Point by and through telephone calls from the plaintiff Breezy Point Cooperative, Inc., and the New York City Fire Department and others” (¶200). It also alleges Defendants “had a duty as a reasonably prudent utility to de-energize or repair arcing, sparking and downed electrical lines that it had notice of within a reasonable time after said notice” (¶201). However, there is no allegation that the referenced arcing or downed lines caused any fire. The amended complaint continued to allege that Defendants should have de- energized the Rockaway Peninsula “to protect the public” (R.207). The amended complaint expressly alleged that Defendants had a duty to “provide for and/or ensure the safety, protection, security and well-being of the property of the general public….” (R.203). The amended complaint also alleged that Defendants had a duty to protect the public in general from fires (R.204-208). 2. Plaintiffs’ Arguments in Opposition Plaintiffs argued that “all of (Defendants’) actions with respect to Sandy were and are proprietary in nature and not entitled to governmental immunity.” (R.271 at ¶7). Plaintiffs argued that Defendants have a common law duty to use reasonable care in maintaining their power lines in a safe condition. (R.512-513). From this premise, plaintiffs reasoned that “Defendants failed in their common law duty to remove downed and arcing lines when they had actual knowledge of it. 13 And the ‘policy’ of not shutting down power to the Rockaway’s (sic) was a negligent proprietary decision” (R.520). Plaintiffs attempted to distinguish the cases Defendants cited on the ground that “(LIPA) is a utility performing a historically proprietary function” (R.517) and argued that LIPA “acted in a proprietary role with regard to the transmission and distribution of electricity to the Rockaway Peninsula.” (R.514). Finally, plaintiffs argued that any immunity that LIPA had is not “transferable to (NGES)” (R.522). Plaintiffs inaccurately characterized Defendants’ arguments as invoking “the so called ‘governmental contractor’ defense” (R.523). Plaintiffs reasoned that because LIPA never “forced or directed (National Grid) to perform the act that gave rise to the plaintiff’s claim” NGES cannot invoke the governmental contractor defense (id.). E. Supreme Court Decision By order dated July 3, 2014 (R.16-24) Supreme Court, Queens County (Siegal, J.), denied the motion to dismiss.5 Supreme Court reasoned that LIPA was not entitled to governmental immunity on the ground that “providing electricity to consumers is a proprietary act because electricity has traditionally been supplied by the private sector” (id. at 21). Supreme Court also addressed Defendant’s 5 Supreme Court issued substantially identical decisions in two other cases, Connolly and Baumann, which were also appealed. 14 argument that “the decision not to de-energize Breezy Point” was a governmental function (id. at 22). Supreme Court, without any analysis, held: “As noted above, the court finds that the Defendants were engaging in proprietary acts” (id.).6 Finally, Supreme Court denied the motion to dismiss the complaint against NGES, which it referred to as “National Grid.” Supreme Court found that National Grid’s argument “fails because, as discussed above, LIPA cannot use governmental immunity as a defense” (id.) and therefore NGES could not use it either. Supreme Court further concluded, in dicta, that “even if LIPA could, National Grid would still not be able to rely on governmental immunity...because...[f]or over 100 years, the well-settled law in this State has been that private contractors that perform work for government entities are liable for their own negligence” (id.) (citing Bates v Holbrook, 171 NY 460, 468 (1902); Turner v Degnon McLean Contracting Co., 99 AD 135, 137 (1st Dep’t 1904), aff’d 184 NY 525 (1906); Ramme v Long Island R. Co., 226 NY 327, 334 (1919)). 6 Supreme Court erroneously denied the motion on the ground that LILCO, which is named as a defendant in the related cases on appeal, Connolly and Baumann, but not in the instant case, is a private entity that cannot assert governmental function immunity. LILCO is not a private entity. LIPA acquired LILCO in 1998, and LILCO became a wholly-owned subsidiary of LIPA. The Legislature expressly granted LIPA the right to exercise and perform all or part of its governmental powers and functions through a wholly-owned subsidiary, and "such subsidiary corporation shall have all the privileges, immunities, tax exemptions and other exemptions of the authority to the extent the same are not inconsistent with the statute or statutes pursuant to which such subsidiary was incorporated .... " Public Authorities Law § 1020-i (2). 15 F. Appellate Division Decision Defendants appealed (R.8-11, 12-15). The Appellate Division, Second Department, by a panel divided 3-1, affirmed the Supreme Court order (R.593- 603).7 The majority concluded that “the provision of electricity is properly categorized as a proprietary function” (R.595) and that LIPA’s storm preparation and response also implicated a proprietary function. The majority reasoned that “responding adequately to a hurricane [is] part of the proprietary core functions of their business” (R.596). Although no court had ever concluded that a measure designed to protect the public, as a whole, ceases to be a governmental function if it is part of the entity’s “core functions,” the majority did not reconcile its new rule with this Court’s jurisprudence. For example, the majority cited Matter of World Trade Center Bombing Litigation (17 NY3d 428 (2011), cert. denied, 133 S. Ct. 133 (2012)), but did not characterize the Port Authority’s security functions as distinct from the Port Authority’s “core functions” as a landlord (R. 596). Instead, the court stated, in conclusory fashion, that “the Port Authority’s responsibility in preparing for and responding to a terrorist threat is very different from the responsibility of an ordinary property owner to keep property reasonably safe” (R.596). 7 The Appellate Division issued decisions in two other cases, Connolly and Baumann, which were appealed and calendared together for argument. The Appellate Division decisions in Connolly and Baumann were issued in accordance with the court’s decision in this case. 16 The majority recognized that actions undertaken to protect the public are governmental, and acknowledged that LIPA’s decisions regarding de-energization affected the public as a whole, stating that the decision not to de-energize before the storm “affected many people and many businesses” (R.596). Nevertheless, the majority concluded that decisions regarding de-energization were proprietary because “every private electrical utility in the region faced the same hurricane” (R.596). The majority did not reconcile this reasoning with numerous Court of Appeals cases finding governmental functions when the government and private entities face the same threats. The majority also denied NGES’s motion, reasoning that “since NGES’s claim of governmental immunity presupposes that LIPA is entitled to governmental immunity, [its] conclusion that LIPA is not entitled to immunity necessarily rejects NGES’s claim of immunity as well” (R.597). Justice Miller dissented. He reasoned that the electrical system “was rendered dangerous by the presence of an external threat,” and functions that protect the public from an external threat are “generally deemed to be governmental” especially when they “implicate discretionary policy decisions regarding the management and prioritization of the multifaceted risks posed by the external hazard” and involve “the utilization of finite resources available to address such threats to public safety” (R.602). Justice Miller explained that LIPA’s 17 immunity in this case furthers “the policy goals underlying the doctrine of governmental immunity” because LIPA’s discretionary decisions “which are often made, as here, while the public at large is facing an immediate threat from an emergency situation, cannot be dictated by the edict of a court or the retrospective conclusions of a jury” (R.602) (internal quotation marks and citations omitted). Justice Miller also explained that the allegations in the amended complaint “relate to (NGES’s) performance of an essential governmental function for LIPA in responding to the crisis created by Hurricane Sandy” (R.602). Accordingly, the dissent concluded that NGES was “not precluded from asserting the defense of governmental immunity by virtue of its status as a private contractor.” (R.602). G. Appellate Division Motion for Leave to Appeal Defendants moved at the Appellate for an order granting leave to appeal to this Court (R. 592). The Appellate Division granted Defendants motion for leave to appeal (R. 592). 18 ARGUMENT POINT I LIPA EXERCISED A GOVERNMENTAL FUNCTION WHEN IT DECIDED NOT TO PREEMPTIVELY DE-ENERGIZE THE ROCKAWAY PENINSULA IN ANTICIPATION OF SUPERSTORM SANDY A. Legal Principles Governmental immunity is rooted in separation of powers principles, and reflects the “value judgment” that “the broader interest in having government officers and employees free to exercise judgment and discretion in their official functions, unhampered by fear of second-guessing and retaliatory lawsuits, outweighs the benefits to be had from imposing liability for that injury.” Haddock v City of New York, 75 NY2d 478, 484 (1990); see also Valdez v City of New York, 18 NY3d 69, 76 (2011). A plaintiff cannot recover damages from the government for harm arising from “discretionary actions taken during the performance of governmental functions.” Valdez, 18 NY3d at 75 (citing Matter of World Trade Ctr. Bombing Litig., 17 NY3d 428 (2011), cert. denied, 133 S. Ct. 133 (2012) (“World Trade Center”)). Governmental functions cannot give rise to tort liability because they derive from duties “owed to the public at large and not to any particular individual 19 or class of individuals.” Cuffy v City of New York, 69 NY2d 255, 260 (1987) (citing H.R. Moch Co. v Rensselaer Water Co., 247 NY 160 (1928)); see also Lauer v City of New York, 95 NY2d 95, 104 (2000). Thus, the touchstone of a governmental function is an activity that fulfills the government’s responsibility to society as a whole. See Applewhite v Accuhealth, Inc., 21 NY3d 420, 428 (2013); World Trade Center, 17 NY3d at 448; Riss v City of New York, 22 NY2d 579, 513 (1986); Miller v State of New York, 62 NY2d 506, 511-512 (1984). One of the “most important” governmental responsibilities to society as a whole is the protection of the public “health and safety” from external threats. Laratro v City of New York, 8 NY3d 79, 81 (2006); Riss, 22 NY2d at 581. The government fulfills its responsibility to protect the public safety in a variety of ways, including police protection, fire protection and 911 service. See Riss, 22 NY2d 579 (municipal police protection); Harland Enters., Inc. v Commander Oil Corp., 64 NY2d 708 (1984) (fire protection); Laratro, 8 NY3d at 79 (911 service). A plaintiff, however, can recover damages from the government under ordinary tort principles for harm arising from the government’s proprietary functions. See Miller, 62 NY2d at 511. Proprietary functions implicate the government’s responsibility to individuals, not to society as a whole, and arise when the functions “substitute for or supplement traditionally private enterprises.” Sebastian v State of New York, 93 NY2d 790, 793 (1999). See Miller, 62 NY2d at 20 511; World Trade Center, 17 NY3d at 448. One reason such activities constitute proprietary functions is that the government essentially competes with private entities, and providing immunity for harm arising out of the government’s competitive activities would furnish the government with an unfair advantage in the marketplace. See Applewhite, 21 NY3d at 434 (Smith, J. concurring); Sebastian, 93 NY2d at 793. Difficult cases arise when the government provides a proprietary service in the marketplace, but also has a responsibility to society to protect the health and safety of the public as a whole. See, e.g., Weiner v Metropolitan Transp. Auth., 55 NY2d 175, 182 (1982) (proprietary transportation services and governmental police protection); World Trade Center, 17 NY3d at 448 (proprietary duties as landlord and governmental duties to provide police protection); see generally Laratro, 8 NY3d at 81; cf. Miller, 62 NY2d at 512 (proprietary duties as landlord but recognizing governmental duties to provide police protection). When attempting to disentangle the governmental obligation to society as a whole from the proprietary obligation to individuals, this Court has recognized that all acts by the government fall on a “continuum of responsibility.” Miller, 62 NY2d at 511. On one end of the continuum lies the government’s proprietary responsibility to “individuals”; on the other lies the governmental responsibility to “society.” Miller, 62 NY2d at 511. The continuum To determine where the 21 activity falls along the continuum of responsibility, the courts analyze the “specific act or omission” that caused the harm, not the general activities of the particular government entity. Id. at 513 (internal quotation marks and citations omitted). B. The Allegations Regarding Preemptive De-Energization Of The Rockaway Peninsula Implicate LIPA’s Governmental Responsibility To Protect The Public As A Whole Here, the gravamen of the amended complaint (R.166-265) is that LIPA’s failure to de-energize the Rockaway Peninsula in anticipation of Superstorm Sandy caused live “wiring and circuits [to come] in contact with flood water,” resulting in fires that destroyed real and personal property (R.208). Critically, the complaint does not allege failures related to the routine operation and maintenance of LIPA’s electric utility equipment on a "blue sky day." The amended complaint expressly alleges that LIPA should have de-energized the Rockaway Peninsula “to protect the public” (R.207) (emphasis added). The amended complaint further alleges that Defendants have a duty to “ensure the safety, protection, security and well-being of the property of the general public….” (R.203) (emphasis added). Thus, the allegations in the amended complaint relate to a failure to protect society as a whole from the effects of Superstorm Sandy. As such, they are immune from second-guessing in a tort action. These allegations fail to state a cause of action because the government is always immune from liability for allegations that it has failed to fulfill a 22 responsibility to society as a whole, such as protecting the public safety. See Applewhite, 21 NY3d at 428; World Trade Center, 17 NY3d at 448; Riss, 22 NY2d at 513. The government may fulfill its responsibility to protect the public health and safety through police protection, fire protection and 911 service. See Riss, 22 NY2d at 579 (municipal police protection); Harland Enters., 64 NY2d at 708 (fire protection); Laratro, 8 NY3d at 79 (911 service). Preparing for and responding to a natural disaster is no less a societal responsibility to protect the public health and safety. The record demonstrates the public safety implications of deciding whether or not to keep the power on instead of deliberately blacking out the entire the Rockaway Peninsula. The Rockaway Peninsula contains over 100,000 residents, many thousands of whom had not evacuated before the storm (R.297-300, R.301- 318, R.430). Before LIPA could de-energize a region, it must be determined that everyone has, in fact, been evacuated, and that the region is completely vacant, as occurred on Fire Island (R.447, Amended Complaint ¶¶179, 189). LIPA does not conduct evacuations, and must therefore “coordinat[e] with State, County and local municipalities” before de-energizing any area, including the Rockaways (¶179, 189). Before deciding to de-energize a region, LIPA and local municipalities would also need to ensure that the region can be safely and timely re-energized after the storm has passed (R.552, 557, 339). 23 Deciding whether to de-energize populous areas such as the Rockaway Peninsula is a policy-laden decision where all available options carry public safety risks. Risks of not de-energizing, as alleged in the complaint, are that live wires can become contacted by salt water, which hypothetically might result in a fire (¶198). On the other hand, intentionally de-energizing the Rockaway Peninsula creates public safety risks. Buildings offer only rudimentary protection from the elements without the electrical power required to generate light and heat. Vital communication systems, street lighting, sump pumps, elevators and traffic controls depend on electricity. The operation of other essential government functions, such as police, fire and emergency medical services also require electrical power. See Applewhite, 21 NY3d at 427. As the evidence plaintiffs submitted in opposing the motions before Supreme Court indicates, “electricity is the glue that holds all critical infrastructure together” (R.538). Of course, the issue on this appeal is not the correctness of LIPA’s discretionary decision not to black out the Rockaway Peninsula, but the protection necessary for LIPA to make that decision without the specter of legal liability from its decision. Here, Plaintiffs’ complain that LIPA should have pre-emptively de- energized portions of its service area. Undoubtedly, if LIPA had actively blacked out such areas, other plaintiffs would have sued LIPA for that decision. See World Trade Center, 17 NY3d at 453 (“governmental immunity provides public entities 24 with the latitude to operate without fear of legal reprisal for the injurious consequences of a particular course of action”). To further illustrate the broad public safety implications of the allegations in the complaint, LIPA’s decisions about de-energization were not limited to the Rockaway Peninsula. Communities other than the Rockaway Peninsula were at risk of flooding. If LIPA should have de-energized the Rockaway Peninsula, should it also have shut down the power to Long Beach, a barrier island? To mainland communities subject to flooding, like Oceanside and Lindenhurst? Thus, by plaintiffs' own allegations, LIPA's decision whether or not to cut off electrical power to the Rockaway Peninsula before Superstorm Sandy is a decision about how to best ensure public safety. Balancing these burdens and risks, and weighing these competing interests is precisely the type of discretionary decision that governmental immunity protects. Individuals are free as citizens to question the wisdom of that governmental decision but not as plaintiffs in an action for tort damages. Although LIPA’s core function -- the routine operation and maintenance of its electric utility equipment on a "blue sky day" -- is proprietary, the allegations in the amended complaint allege failures to protect public safety. These allegations create precisely the same tension that occurs between a landlord’s proprietary duty to protect its tenants and its governmental duty to protect the public as a whole 25 from criminal activity. See World Trade Center, 17 NY3d at 448; Miller, 62 NY2d at 513. Just as the government acts in a proprietary capacity as a landlord when it creates a safe facility for its tenants, LIPA acts in a proprietary capacity as a utility when it provides daily electrical service in a safe manner. See World Trade Center, 17 NY3d at 448; Miller, 62 NY2d at 513. And in the same way a landlord’s duties are governmental when its security measures protect the public, as a whole, from criminal activity, LIPA’s duties are also governmental when its storm preparation and response measures protect the public, as a whole, from a natural disaster, particularly one of epic magnitude such as Superstorm Sandy. See World Trade Center, 17 NY3d at 448; Miller, 62 NY2d at 513. In this respect, the facts here are similar to those in World Trade Center. In that case, 648 plaintiffs commenced 174 actions against the Port Authority of New York and New Jersey (“Port Authority”) for injuries sustained as a result of a terrorist bombing of the World Trade Center complex in 1993. World Trade Center, 17 NY3d at 432. Similarly, these 131 plaintiffs, together with 166 other plaintiffs in nine related actions, sued LIPA, alleging that it negligently prepared for and responded to a natural disaster by failing to de-energize the Rockaway Peninsula before Superstorm Sandy. The plaintiffs in World Trade Center alleged “a negligent failure by the Port Authority to provide adequate security” that included the recommendations of 26 security reports. Id. at 439. By the same token, plaintiffs here allege that LIPA failed “to establish an emergency response plan” that included de-energization of the Rockaway Peninsula (R.207-208). This Court dismissed the complaint in World Trade Center, holding that although “some of plaintiffs’ claims may touch upon the proprietary obligations of a landlord,” the alleged failures “lie, not within the safety measures that a reasonable landowner would implement, but within security operations featuring extensive counterterrorism planning and investigation that required discretionary decision-making with respect to the strategic allocation of police resources.” Id. at 438-439. This Court should similarly dismiss the complaint here because the alleged failures did not involve the safety measures associated with the ordinary provision of electricity, such as installing wires a safe distance from residential homes (Miner v Long Is. Light. Co., 40 NY2d 372, 378-379 (1976)) and using proper insulation of wires transmitting electricity (Braun v Buffalo Gen. Electric Co., 200 NY 484, 490 (1911)). Decisions about de-energizing a large, heavily populated area before Superstorm Sandy involve the protection of public safety from the effects of an historic storm. World Trade Center, 17 NY3d at 448. The alleged failures here and in World Trade Center both stem from the government’s responsibility to society to protect the public safety and are equally entitled to 27 immunity. For these reasons the alleged failures here and in World Trade Center fall squarely on the governmental side of the “continuum of responsibility” which: “begins with the simplest matters directly concerning a piece of property for which the entity acting as landlord has a certain duty of care, for example, the repair of steps or the maintenance of doors in an apartment building. The spectrum extends gradually out to more complex measures of safety and security for a greater area and populace, whereupon the actions increasingly, and at a certain point only, involve governmental functions, for example, the maintenance of general police and fire protection.” Id. at 511-512. C. The Actions Of Private Utilities Cannot Change The Character Of LIPA’s Governmental Decisions Regarding De-Energization The fact that private utilities may have made decisions about de-energizing their own different systems in advance of Superstorm Sandy does not change the governmental nature of LIPA’s decision not to preemptively black out the Rockaway Peninsula. The Appellate Division reasoned that decisions regarding de-energization were proprietary because “every private electrical utility in the region faced the same hurricane” and Consolidated Edison, Inc. (“Con Ed”) de- energized portions of its service area. This reasoning conflicts with this Court’s precedent. The conduct of private utilities is not relevant to determining the nature of LIPA’s decision. 28 If this facile reasoning were applied in World Trade Center, Applewhite and Weiner the outcomes would have been different. In World Trade Center, for example, the Port Authority faced the same threats of terrorism as large private commercial landlords. World Trade Center, 17 NY3d at 457 (Ciparick, J. dissenting). The security reviews used by the Port Authority to assess the risk of a large-scale criminal attack “were not uncommon for commercial landlords” and “independent security consultants were hired by other large private commercial landlords, such as the operators of the Fox Plaza in Los Angeles and the Prudential Center in Boston, to make similar risk assessments during the same period.” Id. Under the Appellate Division’s reasoning, the Port Authority would not have been entitled to immunity because “every [large private commercial landlord] in the region faced the same [threats of criminal activity].” Id. at 436. This Court, however, held that the decisions about security measures to prevent a criminal attack on the Authority's premises were governmental. Id. at 432. The fact that other large private landlords faced identical threats to the public had no bearing on whether the Port Authority’s alleged failure to protect the public was a governmental function. The Appellate Division’s reasoning also ignores the factors that separate Miller from World Trade Center. The Appellate Division acknowledged that "LIPA's response to the hurricane may have involved complex considerations” and 29 that its actions “affected many people and many businesses,” but concluded that “[i]t is not simply the size of the task that determines whether an action is governmental or proprietary (R.596). The determination must also consider the nature of the responsibility.” But an activity’s implication for public safety is precisely what separates a governmental function from a proprietary function because protecting the public as a whole is a quintessentially governmental activity. Indeed, the degree to which the safety measures involve public safety is what separated the unlocked dormitory door in Miller from the complex security measures in World Trade Center. See World Trade Center, 17 NY3d at 438-439; Miller, 62 NY2d at 514 (Kaye, J., concurring) (stating “Although a commercial entity engaged in a particular activity may be required to furnish security guards, a governmental agency performing the same activity does not have the same obligation to assign police”). Likewise, the Appellate Division’s reasoning cannot be reconciled with the outcome in Applewhite. See 21 NY3d at 430, 434, 436-437. There, the entire Court recognized that private EMTs perform exactly the same function as the government EMTs involved in the case and, therefore, both faced precisely the same risks every day. Yet this Court held that EMT services were governmental, expressly stating that “the test cannot be whether the same thing is done by private entities, but rather whether, in providing such services, the governmental entity is 30 exercising the powers and duties of government conferred by law for the general benefit and well-being of its citizens.” 21 NY3d at 428-429. Using the Appellate Division’s reasoning, by contrast, emergency medical services provided by all EMTs would be proprietary because public and private EMTs face the same risks. The Appellate Division’s reasoning also conflicts with Weiner v Metropolitan Transp. Auth. (55 NY2d 175 (1982)). There, the plaintiff sued the New York City Transit Authority for failing to protect her from a criminal assault by a third party while she was on the Authority’s premises. Id. at 178-179. In holding that the Transit Authority was immune from liability, this Court expressly stated: “That a nongovernmental common carrier would be liable under the same factual circumstances is not determinative of the (New York City Transit) authority’s liability.” Id. at 179. Aside from this Court’s precedents, the fact that private utilities also had to decide whether to de-energize portions of their systems does not change the governmental character of LIPA’s decision in the face of an historic storm. First, LIPA bears the responsibilities of the government, and it should be entitled to the benefits of the government, including immunity for governmental functions to protect the public as a whole. LIPA, unlike private utilities, cannot have shareholders or operate for a profit. See Public Authorities Law § 1020-c (3). LIPA must comply with the Freedom of Information Law (see Article 6 of the 31 Public Officers Law); open meetings law (see Public Authorities Law § 1020-x); and portions of the state finance law, the public service law, the social services law, and the general municipal law relating to contracts made by the state (see Public Authorities Law § 1020-cc). Private utilities, which operate for a profit, bear no such responsibility. Further, one purpose of governmental immunity is to protect the public fisc. See Haddock, 75 NY2d at 486. The public, particularly the ratepayers of the service area, will bear the cost of a multi-million dollar judgment against LIPA in this case. The public will bear these costs directly or indirectly in the form of increased insurance premiums. Thus, LIPA’s entitlement to governmental immunity furthers an important purpose of the doctrine. Second, the threat of liability in this context has a greater potential to influence LIPA’s Legislative-Executive decision-making. LIPA is a creature of statute, and therefore, the Legislature has unique Legislative authority over LIPA, as illustrated by the LIPA Reform Act, which significantly altered LIPA’s powers in the wake of Superstorm Sandy. See LIPA Reform Act, L. 2013, ch. 173. The public can therefore use the political process to change how, or whether, LIPA operates. When LIPA makes decisions to protect the public safety, it should be free from the specter of tort liability and the potential Legislative response caused by that liability. Shielding governmental decision-making from the improper 32 influence of threats of tort litigation is precisely what governmental function immunity was designed to accomplish. See Haddock, 75 NY2d at 484; see also Valdez, 18 NY3d at 76. Finally, one important reason proprietary functions are subject to ordinary tort principles is that the government essentially competes with private industry when it engages in proprietary activity, and immunizing the government for competitive activities would provide the government with an unfair advantage in the marketplace. See Applewhite, 21 NY3d at 434 (Smith, J. concurring); Drever v State of New York, 134 AD3d 19 (3d Dept 2015) (stating the fact “that defendant...has not undertaken the function for profit or revenue favors placing the challenged activity at the governmental end of the continuum”); Kochanski v City of New York, 76 AD3d 1050 (2d Dept 2010) (“dealing with children in need of foster care...is undertaken without thought of profit or revenue” and is a governmental function); cf. Matter of Karedes v Colella, 100 NY2d 45 (2003) (holding that activities related to village-owned golf course were a proprietary function and observing that the village operated the golf course “for a profit”). Such considerations do not exist in this context. LIPA operates exclusively in its service area, just like every other utility. See Public Authorities Law §§ 1020- b(17), 1020-c (2). Thus, LIPA and private utilities do not compete for business in any way. 33 D. Protecting The Public From Natural Disasters And Criminal Activity Are Both Governmental Functions Plaintiffs and the Appellate Division also distinguished this case from the World Trade Center case on the grounds that the alleged failure in World Trade Center involved protecting the public from criminal activity and the alleged failure here involves protecting the public from a natural disaster. This superficial difference does not change the character of LIPA’s decision. Protecting the public from a storm and criminal activity both arise from the government’s responsibility to protect society as a whole. Sebastian, 93 NY2d at 795; see Miller 62 NY2d at 511-512; Riss, 22 NY2d at 581. Whether to de- energize the Rockaway Peninsula and other areas of LIPA’s service area is a highly discretionary, policy-laden decision, where all available options carry certain public safety risks, as previously discussed. The liability for failures related to protecting the public from criminal activity and a natural disaster both imperil the public fisc in the same way. And the potential liability for failures related to both activities will affect government decision-making in exactly the same way. Thus, the superficial differences between protecting the public from crimes and natural disasters carry no legal consequence. Immunity for protecting the public as a whole – regardless of whether the danger comes from a criminal wrongdoer or a natural disaster – is not a novel concept. This Court has always recognized that activities related to public safety 34 are quintessential governmental functions and has been careful to explain that the threat from criminal activity is merely one illustrative example. For example, this Court recently reiterated that governmental functions are “undertaken for the protection and safety of the public...” See Turturro v City of New York, __ NY3d __, 2016 N.Y. LEXIS 3895 at *8, 2016 WL 7389237 (Dec. 22, 2016) (quoting Applewhite, 21 NY3d at 425 and Sebastian, 93 NY2d at 793) (internal quotation marks omitted). The dissenting Judge agreed, stating that governmental functions are performed “for the protection and safety of the public at large...” Id. at *28 (Pigott, Jr., J. dissenting). Likewise, this Court in Riss held that the government was immune from liability arising from the “provision of a governmental service to protect the public generally from external hazards and particularly to control the activities of criminal wrongdoers” 22 NY2d at 581. This holding makes plain that protecting the public from external threats is a governmental function, and protection from “criminal wrongdoers” in particular is merely one type of “external hazard” the public faces. Obviously, other such hazards exist. See, e.g., Harland Enters., 64 NY2d at 708 (protection from fires); Laratro, 8 NY3d at 81 (protection from medical emergencies). The lower courts have recognized the obvious parallels between the government’s duty to protect the public from criminals and natural disasters. See, 35 e.g., Cockburn v City of New York, 129 AD3d 895, 896 (2d Dept 2015); Estate of Radvin v City of New York, 119 AD3d 730 (2d Dept 2014); Freeman v City of New York, 111 AD3d 780, 782 (2d Dept 2013); Stathakos v Metropolitan Tr. Auth. Long Is. R.R., 109 AD3d 979 (2d Dept 2013); Kadymir v New York City Tr. Auth., 55 AD3d 549, 550 (2d Dept 2008). In fact, until this case, the lower courts have consistently afforded governmental immunity for activities to protect the public from natural disasters. In Freeman, for example, the plaintiff sued the City and its Department of Sanitation, alleging that they were “negligent in failing to provide emergency services, and in failing to prepare for, and respond to, [a] snowstorm.” 111 AD3d at 781 (citing World Trade Center, 17 NY3d at 446-447; Applewhite, 21 NY3d at 425; Sebastian, 93 NY2d at 793). The Appellate Division, however, dismissed the portion of the complaint relying upon allegations that municipal defendants “were negligent in preparing for and responding to the subject snowstorm” because such activities “implicate the exercise of a governmental function.” Freeman, 111 AD3d at 782. Similarly, in Stathakos, the plaintiff sued the “Metropolitan Transit Authority Long Island Railroad” (MTA-LIRR), seeking damages for the cost of monthly commutation tickets that plaintiff purchased but was unable to use because the MTA-LIRR “suspend[ed] or cancel[ed] service on certain days due to 36 severe weather conditions.” Stathakos, 109 AD3d at 979-980. The Appellate Division granted the Defendant’s motion to dismiss the complaint, holding that the MTA-LIRR’s “decision to suspend services because of weather conditions” constituted a discretionary governmental function that was immune from liability. Id. (citing Haddock, 75 NY2d at 484 (1990); Kelleher v Town of Southampton, 306 AD2d 247, 248 (2003); Leeds v Metropolitan Transp. Auth., 117 Misc.2d 329 (1983); see generally Valdez, 18 NY3d at 75; McLean v. City of New York, 12 NY3d 194, 203 (2009)). In Kadymir (55 AD3d 549, 550 (2d Dep’t 2008)), the plaintiff sued the New York City Transit Authority (“TA”) after sustaining injuries while evacuating a subway during a massive blackout. The Appellate Division acknowledged that the Transit Authority performed a proprietary function when “provid(ing) a safe means of egress from its train.” Id. at 551. However, it held that the plaintiff’s injuries “arose from [the TA’s] discretionary decision to evacuate passengers from the subway train directly onto the track bed” after the train had stopped “as a result of a massive regional blackout.” Id. at 552. The Appellate Division concluded that the discretionary decision, based upon the TA’s professional judgment, was a governmental function. Id. In this case, however, the Appellate Division refused to acknowledge that preparing for and responding to a monumental “Superstorm” was a governmental 37 function and did not attempt to reconcile its decision in this case with the body of its own case law that had developed for years. An affirmance in this case would effectively overrule each of the foregoing cases, fundamentally altering the landscape on which municipalities and public authorities have operated for years. E. Plaintiffs’ Additional Allegations Implicate A Governmental Function The amended complaint contains factual allegations not included in the original complaint. Defendants are immune from liability for these alleged failures as well because they relate to governmental responsibilities. The amended complaint alleges that LIPA also failed to “repair arcing and downed electrical lines that it had notice of within a reasonable time” (¶201, 202). In support of this allegation, plaintiffs included a log book from the Breezy Point Cooperative indicating that at 10:10 a.m. on October 29, 2012 – the day that Superstorm Sandy hit New York and many hours after members of the public were required by the Mayor’s order to have evacuated the Rockaways – the plaintiff Breezy Point Cooperative notified the New York City Fire Department, which in turn notified LIPA, of arcing power lines (R.297-300; see also R.301-318). Other evidence submitted by plaintiffs indicates that the Superstorm had begun to affect Long Island by this time. By 11:16 a.m. on October 29, 2012, LIPA’s transformers “on Captree island [were] in 2 feet of water” (R.440). Thus plaintiffs essentially allege that LIPA was negligent by not repairing arcing power lines during 38 Superstorm Sandy, a storm that plaintiffs describe as an “immense[e]” storm with “the potential for historic flooding” (¶ 187). Plaintiffs characterize the allegations in the complaint as the mere negligent provision of electricity and maintenance of power lines. But the repair of arcing power lines during Superstorm Sandy stands in stark contrast to the ordinary provision of electricity and routine maintenance of power lines on a “blue sky” day. In this respect, the allegations regarding emergency repairs made in the amended complaint are similar to those in Applewhite, where the plaintiff sued the City of New York for injuries allegedly arising from medical care she received from emergency medical technicians (EMTs) employed by the City. See 21 NY3d at 424. The plaintiff conceded that dispatching an ambulance in response to a 911 call is a governmental function, but argued that “the governmental function terminated with the arrival of the EMTs at [the plaintiff]’s home and a proprietary function arose once emergency medical care was undertaken since treatment of this nature [was] generally offered by private parties.” Id. at 427. The Court of Appeals rejected this argument, explaining that although “medical services such as mental health care” were proprietary functions, “[e]mergency medical services...have widely been considered one of government’s critical duties” and “front-line EMTs and other first responders....exist ‘for the 39 protection and safety of the public.’” Applewhite, 21 NY3d at 428 (citations omitted). Just as the EMTs in Applewhite existed for the public safety, LIPA also exists “for the protection and safety of the public.” Id. The Legislature created LIPA to address “a situation threatening the economy, health and safety...in the service area,” and to “provide safe and adequate service.” Public Authorities Law § 1020-a (emphasis added). Moreover, the Legislature declared that LIPA was intended to perform “an essential government function.” Public Authorities Law § 1020-p (1); see also Public Authorities Law § 1020-c (1)(declaring that LIPA exercises “essential governmental and public powers”). The Legislature created LIPA to be the exclusive provider of electrical power in the service area; LIPA does not “provide supplemental support” to a private entity in the service area. Applewhite, 21 NY3d at 428; see also Pub. Auth. L. § 1020-a. In Applewhite, this Court distinguished the provision of ordinary medical services in a hospital setting, see, e.g., Schrempf v State of New York, 66 NY2d 289, 289 (1985), from the provision of emergency medical services in response to a 911 call. See 21 NY3d at 424; see also Radvin, 119 AD3d at 732. Analogously, the ordinary provision of electricity and routine maintenance of power lines on a blue sky day is distinguishable from an emergency response to a natural disaster. Compare Bliss v Village of Arcade, 306 AD2d 902, 903 (4th Dept 2003) (holding that the negligent maintenance or repair of a municipality’s power lines is a 40 proprietary function subject to ordinary tort principles) with Freeman, 111 AD3d at 782 (holding that the preparation for and response to a snowstorm is a governmental function immune from tort liability); Radvin, 119 AD3d at 733 (same). At bottom, LIPA’s emergency response to a natural disaster, as alleged in the amended complaint, is designed to protect the public as a whole, and actions “undertaken for the protection of the public” are historically the responsibility of the government. See World Trade Ctr., 17 NY3d at 448; Sebastian, 93 NY2d at 795; Miller, 62 NY2d at 512; Riss, 22 NY2d at 581. Likewise, the record here describes individuals under LIPA’s direction who respond to natural disasters by repairing arcing power lines as “energy system first responders” (R.359). Distinguishing the ordinary provision of electricity and routine maintenance of power lines from an emergency response to a natural disaster, including the decision not to repair downed power lines during a storm, complies with this Court’s instruction that the courts must analyze “the specific act or omission of which the injury is claimed to have arisen and the capacity in which that act or failure to act occurred, not whether the agency involved is engaged generally in proprietary activity or is in control of the location in which the injury occurred.” Weiner, 55 NY2d at 182. The critical inquiry here is whether or not LIPA’s decision to de-energize a populous region before a “Superstorm” or whether or not 41 to repair certain arcing power lines during a violent storm are performed in LIPA’s governmental capacity. See id. There can be little doubt that they are. Like all governmental entities, LIPA has finite resources and cannot repair all downed power lines simultaneously. The record indicates that approximately 1,000,000 customers throughout LIPA’s service area lost power during Superstorm Sandy. LIPA was allegedly forced to make policy decisions on how to best allocate its resources by prioritizing the repair of power lines based upon “the density of customers in a given structure” (R.342). See World Trade Center, 17 NY3d at 448; Riss, 22 NY2d at 581-582. LIPA also had to assess the safety of sending work crews out in the fierce elements with near hurricane force winds. Thus, a claim based upon when, where and how LIPA decides to repair power lines during Superstorm Sandy is a direct challenge to the manner in which LIPA allocates resources. See World Trade Center, 17 NY3d at 448; Riss, 22 NY2d at 581-582. F. LIPA’s Entitlement To Governmental Immunity In This Case Furthers The Purpose Of The Doctrine More fundamentally, imposing liability for deciding whether or not to preemptively de-energize the Rockaway Peninsula would result in the precise societal harm that governmental function immunity seeks to prevent: making governmental entities less effective due to the threat of excessive liability, which “deter[s] or paralyze[s] useful activity.” Laratro, 8 NY3d at 82. If liability were 42 imposed in this case, LIPA and all other municipal entities whose functions include both proprietary and governmental aspects would be less effective in several ways. In future cases, the threat of excessive liability for the decision whether or not to de-energize an entire region would “inevitably determine how limited [governmental] resources of the community should be allocated and without predictable limits.” Riss, 22 NY2d at 582. When LIPA decides whether or not to intentionally black out a portion of its service area, which reaches over 100 miles from Breezy Point to Orient and Montauk Point, in advance of future storms, the potential liability associated with this decision would invariably enter the calculus, if not dictate the decision. Consequently, the threat of liability for decisions related to de-energization will encroach upon “legislative-executive” decision-making. Riss, 22 NY2d at 582. To illustrate, the choice to preemptively de-energize one of the many regions at risk of flooding necessarily influences the emergency preparation and response plan of both LIPA and local municipalities. For obvious safety reasons, a region should be completely vacant before LIPA can safely de-energize its electrical system in the region (R.205-206). Before LIPA can preemptively de-energize a region, local municipalities must therefore expend resources to determine that everyone in the region has, in fact, been evacuated, as occurred on Fire Island (R.447). Before deciding to de-energize a region, LIPA and local municipalities 43 must also dedicate resources to ensure that the region can be safely and timely re- energized after the storm has passed (R.552, 557; R.339). Consequently, before preemptively de-energizing, LIPA and the local municipalities in the service area, which includes two counties and portions of a third, thirteen towns, two cities and one-hundred and three villages, must consider, among many other factors, whether its resources are best utilized by de-energizing and re-energizing a region or by preparing for and recovering from a storm in a myriad of other ways (R.443-444). To make this determination, LIPA and the local municipalities must conduct a cost-benefit analysis based, not only upon their own resources, but also upon the likelihood of flooding throughout the entire service area and the feasibility of alternatives to de-energizing. Introducing the threat of tort liability into this equation could easily induce LIPA to de-energize more frequently to avoid the risk of a lawsuit, thereby shifting resources toward activities necessary to effectuate de-energization and re- energization and away from other storm preparation and recovery methods (R.443- 444). Diverting resources toward de-energization, however, will not necessarily increase public safety. As discussed, a de-energized region is extremely dangerous. Buildings offer only rudimentary protection from the elements without the electrical power required to generate light and heat. Electrical power is also indispensable to the operation of police, fire and emergency medical services 44 (R.538). Moreover, the resources necessary to de-energize a region divert significant resources away from other preparation and recovery activities (R.443- 444). Refusing to recognize LIPA’s governmental immunity in this case would cause the exact societal harm the governmental function immunity doctrine seeks to prevent: altering how governmental resources are allocated without predictable limits. In addition, if LIPA can be liable for decisions about de-energization, lawsuits claiming that LIPA was negligent because it de-energized a region will invariably occur. 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. Vital communication systems, street lighting, sump pumps, elevators and traffic controls depend on electricity. The operation of other essential government functions, such as police, fire and emergency medical services also require electrical power. See Applewhite, 21 NY3d at 427. LIPA will therefore be exposed to potential lawsuits whether it decides to de-energize or if it decides not to de-energize. This “Catch- 22” is, no doubt, what this Court contemplated when it explained that the rationale for governmental function immunity is that “the threat of liability might...paralyze useful activity.” Laratro, 8 NY3d at 82. 45 Finally, a denial of governmental function immunity in this case will have chilling effects on the myriad other public authorities and municipal entities of this state with proprietary as well as governmental duties. Concern for potential tort liability would loom over even their most complex and broadly consequential decisions and actions involving matters affecting the health and safety of the public at large. POINT II THE AMENDED COMPLAINT FAILS TO ALLEGE FACTS THAT, IF PROVEN, WOULD ESTABLISH AN EXCEPTION TO THE GOVERNMENTAL FUNCTION IMMUNITY DOCTRINE A. General Legal Principles The courts have recognized only a narrow exception to governmental function immunity. See McLean, 12 NY3d at 202; Tango v Tulevech, 61 NY2d 34, 40 (1983). Although there had been some confusion as to elements of the exception, the Court of Appeals recently clarified the uncertainty, holding that the narrow exception applies only when (1) the governmental action is “ministerial” and (2) the plaintiff has a “special relationship” with the governmental entity. McLean, 12 NY3d at 203. Neither is present here. Ministerial acts require “adherence to a governing rule, with a compulsory result.” Lauer, 95 NY2d at 99. Discretionary acts, on the other hand, involve “the 46 exercise of reasoned judgment which could typically produce different acceptable results,” but which may lead to an “ultimate determination” that is “incorrect.” Tango, 61 NY2d at 14; see also Lauer, 95 NY2d at 99. A “special relationship” can exist in three situations: (1) when the municipality violates a statutory duty enacted for the benefit of a particular class of persons; (2) when it voluntarily assumes a duty that generates justifiable reliance by the person who benefits from the duty; or (3) when the municipality assumes positive direction and control in the face of a known, blatant and dangerous safety violation. Pelaez v Seide, 2 NY3d 186, 199-200 (2004). Where, as here, however, the governmental action is unquestionably discretionary in nature, the presence or absence of a special relationship is academic. See McLean, 12 NY3d at 203. B. The Nature Of The Decision Not To De-Energize The Rockaway Peninsula Is Discretionary, Not Ministerial Here, LIPA’s decisions not to de-energize the Rockaway Peninsula or send out a crew to repair arcing power lines during a natural disaster, as alleged in the amended complaint, were discretionary, not ministerial. Plaintiffs do not appear to dispute this. The amended complaint alleges that LIPA should have de-energized the Rockaway Peninsula prior to Superstorm Sandy and should have repaired arcing power lines during Superstorm Sandy to avoid “fire and electrical hazards posed by wiring and circuits coming into contact with flood water” (¶198). 47 According to the amended complaint, the likelihood of flooding was based upon prior storms and a weather forecast that predicted that the Rockaways would experience significant flooding (¶198-199). The amended complaint also alleges that LIPA should have de-energized the Rockaway Peninsula “in coordination with the evacuation activities” of local municipalities (¶189-190). Such a decision necessarily requires “reasoned judgment” about the probability of future events (the scope of flooding caused by the storm); contemporaneous events controlled by third parties (evacuations supervised by local municipalities); a cost-benefit analysis of the differing methods to protect vulnerable substations (pumps and sandbags or de-energization); and whether to de-energize all, some or none of the vulnerable shores of Long Island from Queens to Montauk. Lauer, 95 NY2d at 99. Thus, LIPA could not merely “adher(e) to a governing rule, with a compulsory result.” Lauer, 95 NY2d at 99. LIPA’s choice to de-energize Fire Island but not “any other parts of Long Island” further underscores the discretion inherent in the decision (R.448). Similarly, the decision not to send out a crew during Superstorm Sandy also requires “reasoned judgment” to balance the risks of allowing an arcing power line to remain against the risks of sending out repair crews in the middle of a superstorm. Lauer, id. The case law addressing the discretionary/ministerial distinction further illustrates the discretionary nature of the decision to de-energize the Rockaway 48 Peninsula or repair arcing power lines during Superstorm Sandy. In Tango, a government officer’s incorrect decision to return children to their mother instead of referring the matter to a judge for a custody determination was discretionary. See Tango, 61 NY2d at 41. Here, the decision to de-energize the Rockaway Peninsula before Superstorm Sandy or repair arcing power lines during Superstorm Sandy required the exercise of reasoned judgment about the weather forecast of flooding, the coordination with the appropriate local municipalities and a cost-benefit analysis of de-energizing compared to alternative measures, just as the decision in Tango required the exercise of “judgment as to whether court action was appropriate” in favor of returning the children to their mother. 61 NY2d at 41. 49 POINT III NGES, AS AN ENTITY IN CONTRACT WITH LIPA, PERFORMED A GOVERNMENTAL FUNCTION IN PREPARING FOR AND RESPONDING TO SUPERSTORM SANDY A. Legal Principles When a governmental entity contracts a private entity to perform a governmental function for which the governmental entity is immune from tort liability, the private entity is immune from tort liability to the same extent that the government entity would be immune if it were performing the same functions itself. See Altro v Consolidated Rail Corp., 130 AD2d 612, 613 (2d Dept 1987); see also Filarsky v Delia, 132 US 377 (2012). For example, the plaintiff in Altro commenced an action against Conrail, a private entity that operated railway service “pursuant to an agreement with the Metropolitan Transportation Authority” (MTA). Altro, 130 AD2d at 612. Plaintiffs alleged that Conrail “fail[ed] to allocate sufficient resources to the maintenance and supply of railroad cars,” resulting in delays, inadequate seating, lack of air conditioning and unsanitary railroad cars. Altro, 130 AD2d at 612. The court noted that plaintiffs “could not maintain an action directly against the MTA to compel it to allocate its resources in a particular manner . . . (see Weiner55 NY2d 175).” Id. Plaintiffs could not maintain this action against the MTA because the MTA was performing a governmental function, as demonstrated by the 50 Court’s citation of Weiner, a governmental function immunity case, and its reference to allocation of resources, an essential feature of a governmental function. See World Trade Ctr., 17 NY3d at 448-449. From this premise, the Court reasoned that plaintiffs could not maintain an action against Conrail “since Conrail is performing an essential governmental function for the MTA and the appellant’s claims are based upon the decisions of the MTA, through its control of Conrail’s budgets, as to the allocation of resources for this function.” Id. at 613. Similarly, in Filarsky, a firefighter commenced a § 1983 action against the City of Rialto, its fire department, and the plaintiff (a private attorney hired by the City) for alleged Constitutional violations committed during an investigation. 132 US at 380. The U.S. Court of Appeals for the Ninth Circuit dismissed the action against all the Defendants except the plaintiff, reasoning that the plaintiff, as a private individual, was not entitled to qualified immunity. Id. at 382. The U.S. Supreme Court reversed on the ground that a private individual temporarily retained by the government to carry out its work is entitled to qualified immunity. The Court explained that the common law doctrine of qualified immunity for the performance of governmental functions “did not draw a distinction between public servants and private individuals engaged in public service in according protection to those carrying out governmental responsibilities.” Id. at 385-386. The Court further explained that denying qualified immunity to private individuals assisting 51 the government “will substantially undermine an important reason immunity is accorded public employees in the first place.” Id. at 391. The “distraction of lawsuits” will affect the government contractor, but it will “also often affect any public employees with whom they work by embroiling those employees,” who will often be forced to testify in litigation. Id. B. NGES Is Entitled To The Same Immunity As LIPA When It Performs Governmental Functions Here, LIPA contracted for NGES to operate and maintain its T&D System, just as the City of Rialto contracted a private attorney to conduct an investigation in Filarsky and the MTA contracted Conrail to operate a railroad in Altro (R.52- 117, MSA §§ 3.1(A), 4.3). LIPA and NGES performed a governmental function by preparing for and responding to Superstorm Sandy. See Point I, supra. Similarly, the private Defendants and the governmental entities in Filarsky and Altro also performed governmental functions by conducting a governmental investigation and operating a railroad. In the same way that the private parties in Filarsky and Altro were immune from tort liability for performing governmental functions, NGES is also immune from tort liability for performing governmental functions. Affording NGES the same immunity as LIPA furthers the purpose of governmental function immunity – preventing governmental entities from becoming less effective at protecting their citizens due to the specter of excessive 52 liability. Laratro, 8 NY3d at 82. The focus of governmental function immunity is the effect that excessive liability has on the governmental entity, and that effect is the same whether the actor is an employee or a contractor. Refusing to afford NGES governmental function immunity in this case would create the precise societal harm governmental function immunity was designed to prevent. LIPA is contractually obligated to indemnify NGES for negligence in the operation of the T&D System, making LIPA (and therefore the ratepayers) ultimately financially responsible (R.52-177, MSA §§ 3.1(A), 4.3). If LIPA were granted governmental function immunity for the allegations in the amended complaint, but remained ultimately financially responsible for liability from the operation of the T&D System, it would be less effective due to the threat of excessive liability, which “deter[s] or paralyze[s] useful activity,” in the exact same ways as described in Point I.F. Laratro, 8 NY3d at 82. Recognizing LIPA’s immunity while refusing to extend that immunity to NGES would therefore defeat the purpose of governmental function immunity. This Court has applied the same reasoning to extend governmental immunity to private entities in an analogous context. See, e.g., Crown Communication New York, Inc. v Dept. of Transp. of State of NY, 4 NY3d 159, 168, cert. denied, 546 US 815 (2005). This Court recognized that a private entity and the municipality were immune from zoning requirements because refusing to recognize the 53 immunity of private entities would foil the purpose of immunity. See Crown, 4 NY3d at 168. Affording NGES governmental function immunity for the governmental functions that LIPA contracted it to perform also supports the State’s public policy in attracting talented governmental contractors. See Filarsky, 132 S.Ct. at 1666. If only governmental employees are immune from liability, “those working alongside them could be left holding the bag – facing full liability for actions taken in conjunction with government employees who enjoy immunity for the same activity. Under such circumstances, any private individual with a choice might think twice before accepting a government assignment.” Filarsky, 132 S.Ct. at 1666. Likewise, refusing to afford NGES and LIPA the same immunity for performing the same governmental functions would surely discourage NGES and other private entities from accepting contracts from LIPA, undermining the State’s public policy of attracting talented government contractors. Filarsky, 132 S.Ct. at 1666. Finally, affording NGES governmental function immunity under these circumstances is consonant with agency principles. In New York, “an agent who is acting within his authority is entitled to the immunities of the principal.” Howard v Finnegans Warehouse Corp., 33 AD2d 1090, 1090 (3d Dept 1970); see Berger v 34th St. Garage, Inc., 3 NY2d 701, 703 (1958) (holding that an agent, “while 54 acting pursuant to his authority, was entitled to such immunities of the principal as are not personal to the principal”) (internal quotation marks and citations omitted). In Howard, the plaintiffs sought “recovery for damage to personal property caused by fire while it was being transported in Defendant (Finnegans Warehouse Corp.)’s moving van.” 277 AD at 571. The parties stipulated that a different Defendant, “La Forge[,] was acting on behalf of the corporate Defendant as its employee” when the plaintiffs’ property was damaged. Id. As an affirmative defense, both Defendants asserted that Defendant’s liability was “limited to $.30 per pound” based upon a contract between plaintiffs and Finnegans Warehouse Corp. Id. Plaintiff moved to dismiss the affirmative defense, arguing that the bill of lading agreement did not “limit the liability of Defendant La Forge” specifically. Id. The Special Term denied the motion, and the Appellate Division affirmed. The Appellate Division explained that in New York, “an agent who is acting within its authority is entitled to the immunities of the principal.” Id. Applying this rule, the Appellate Division reasoned that “[s]ince it is stipulated that La Forge was acting on behalf of the Defendant corporation [Finnegans Warehouse] at all times, we conclude that he is entitled to the benefit of the limitation of liability.” Although Howard arose in the context of a contract that limited the amount of damages, the principle is not limited to such cases and applies with equal force 55 to governmental function immunity. See, e.g., Mohammed v D.H. Farney Contractors, 881 F.Supp 110, 112 (S.D.N.Y. 1995) (citing Howard) (dismissing a cause of action against an agency because the principal was immune from federal jurisdiction). Here, the complaint alleges: “At all times mentioned herein, each of the named Defendants was the representative, agent, employee, joint venture participant, or alter ego of each other and, in conducting itself as alleged herein, was acting within the scope of its authority (R.196). By the terms of the complaint, LIPA and NGES were functionally one and the same. Therefore, NGES acted within the scope of its authority when preparing for and responding to Superstorm Sandy. Howard, 33 AD2d at 1090. Further, the amended complaint alleges that NGES was “an instrumentality or conduit” of LIPA (R.196). Likewise, the Management Services Agreement defines NGES as the “Manager” (R.60), and “[i]t is generally understood that a ‘manager’ is an agent.” Isbrandtsen Co. v Lenaghan, 128 F.Supp. 662, 664 (S.D.N.Y. 1954). Thus, it is undisputed that at all times relevant to the complaint, NGES was acting “on behalf of” LIPA, just as La Forge was acting “on behalf of” Finnegans Warehouse Corp. Howard, 33 AD2d at 1090. Accordingly, in the same way that La Forge was entitled to the immunities of Finnegans Warehouse Corp., NGES is entitled to the immunities of LIPA. Id. 56 C. Plaintiffs Mistakenly Relied Upon Inapplicable Case Law Addressing Nuisances And Trespass Plaintiffs argued and Supreme Court held that in New York “private contractors that perform work for government entities are liable for their own negligence” (R.23) (citing Bates v Holbrook, 171 NY 460, 468 (1902); Ramme v Long Island R. Co., 226 NY 327, 334 (1919); Mairs v Manhattan Real Estate Ass’n, 89 NY 498 (1882); Turner v Degnon McLean Contracting Co., 99 AD135, 137 (1st Dept 1904). 8 These cases, however, involved sovereign immunity, not governmental function immunity. Different rules apply to sovereign immunity and governmental function immunity because the two doctrines are fundamentally different. See World Trade Ctr., 17 NY3d at 442; Brown v State of New York, 89 NY2d 172, 192 (1996). Governmental function immunity is a judicially-created defense that protects governmental entities “as a matter of policy” so that government officials can freely exercise their judgment without the specter of excessive liability. World Trade Center, 17 NY3d at 445-446 (internal quotation marks omitted); see Haddock, 75 NY2d at 484. Thus, governmental function immunity, which protects 8 Turner and Bates, which involved the use of explosives, have limited practical application, if any, today. As an ultra-hazardous activity, such work is subject to strict liability under subsequent precedent from the Court of Appeals. Spano v Perini Corp., 25 NY2d 11 (1969). Supreme Court and Plaintiffs apparently cite these cases as authority for an all-encompassing rule regarding the transference of sovereign immunity and immunity-based defenses to governmental contractors. As will be discussed more fully, these cases do not establish a rule for government contractors and governmental function immunity. 57 governmental functions but not proprietary functions, focuses on the essential character of the activity. Riss, 22 NY2d at 582. Sovereign immunity, by contrast, is “derived from the State’s status as a sovereign.” Brown, 89 NY2d at 192. In all the cases cited by Plaintiffs and Supreme Court, the courts had to decide whether the government’s sovereign immunity transferred to the government contractor, not whether the performance of a governmental function entitled the governmental contractor to governmental function immunity. See, e.g., Ramme, 226 NY at 333. In Turner, for example, the Court referred to the “immunity [that] the city of New York” would be entitled to if it were “doing the work without the intervention of a contractor.” Turner, 99 AD at 136. The court’s use of the term “immunity” in this context, referred to sovereign immunity, not governmental function immunity. See Cassell v Babcock & Wilcox Co., 186 AD2d 1000, 1001 (4th Dept 1992) (stating “[we] further find that [Defendant] is not entitled to avail itself of the doctrine of sovereign immunity” and citing Turner v Degnon McLean Contracting Co., 99 AD 135, 136-137 (1st Dep’t 1904), aff’d 184 NY 525 (1906)). The court did not determine whether the City itself would be immune if it performed the same work, concluding: It is unnecessary, however, for us to determine the question of what would be the liability of the city, were it the contractor, because, in our view, the premise upon which the argument of the appellant is built, namely, that 58 the contractor stands in the same position as would the city, if engaged in the work, is not sound, and cannot be supported. Id. at 136. The court, however, determined that “the premise upon which the argument...is built...[was] not sound” because the contractor exceeded the authority given by the contract. The court relied upon the holding in St. Peter v Denison, 58 NY 416 (1874) that “the Defendant had no right greater than any other individual to take or intrude upon the premises outside the external lines of the enlarged canal.” The court concluded that the Defendant “had no right to use or intrude upon the public street outside the line of the public work.” Turner, 99 AD at 137- 138. In Bates, this Court stated that “acts which are authorized by the express enactments of the legislature...do not render the person performing them liable...unless there is an absence of due care.” 171 NY at 468. This Court confirmed that the basis for this statement of the law was the State’s sovereign immunity by noting that in the case of “‘a positive invasion of the individual rights guaranteed by the Constitution, legislative sanction is ineffectual as a protection to the persons or corporation performing such acts from responsibility for their consequences.’” 171 NY at 471 (quoting Seifert v City of Brooklyn, 101 NY 136, 144 (1886)); see also Herman v City of Buffalo, 214 NY 316, 318 (1915) (holding 59 that sovereign immunity did not protect the City of Buffalo from immunity for liability arising from creating a private nuisance). Similarly, in Mairs, this Court held that the Defendant government contractor could be liable for damages caused by flooding on the plaintiff’s property, which occurred because the Defendant “interrupt[ed] the flow of [rain] water” on behalf of a municipal corporation. 89 NY at 506. This Court explained that “[a] municipal corporation may, in some cases, in the exercise of powers legally granted...do acts...which may result in consequential injuries to the property of adjacent owners.” 89 NY at 505. The reference to “powers legally granted” refers to the municipality’s sovereign immunity granted by the State. The Court’s holding that the Defendant lacked the authority to cause flooding on the plaintiff’s land confirms that the Court was referring to sovereign immunity because even the municipal corporation that authorized the work could not have escaped liability for flooding on the plaintiff’s land, as the Court acknowledged by stating “[a] municipal corporation has itself been held liable for throwing water collected in the gutter of a street, upon the land of a private owner. (Byrnes v City of Cohoes, 67 NY 204 (1876)).” 89 NY at 505; see also Benner v. Atlantic Dredging Co., 134 NY 156, 161 (1892) (stating “[i]t being lawful for the sovereign to exercise its lawful power, it must follow that whatever results from its proper exercise is not unlawful, and if any injury, direct or consequential, results to the individual, he is 60 remediless”); Herman, 214 NY at 318. Accordingly, the causes of action in the amended complaint against NGES must be dismissed. CONCLUSION In sum, the Court must reverse the Appellate Division order and grant Defendants’ motion to dismiss because the complaint alleges that Defendants failed to fulfill their governmental societal responsibility to protect the public safety. In the alternative, the Court should modify the Appellate Division order so that the parties can submit evidence regarding the governmental nature of Defendants’ alleged failures and the lower courts can issue a decision on a complete evidentiary record. Based on the foregoing, the Court should (1) reverse the order of the Appellate Division, Second Department dated November 10, 2015 and (2) dismiss the amended complaint in its entirety as against LIPA and NGES. In the alternative, the Court should (1) modify the Appellate Division order and (2) remand the matter for further proceedings not inconsistent with the Court’s decision. Dated: Melville, New York January 19, 2017 61 Respectfully Submitted, LAZER, APTHEKER, ROSELLA & YEDID, P.C. Attorneys for Defendant-Appellant LONG ISLAND POWER AUTHORITY By: David Lazer 225 Old Country Road Melville, New York 11747 (631) 761-0810 HAMMILL, O’BRIEN, CROUTIER, DEMPSEY, PENDER & KOEHLER, P.C. Attorneys for Defendant-Appellant NATIONAL GRID ELECTRIC SERVICES LLC i/s/h/a KEYSPAN ELECTRIC SERVICES, LLC By: William J. Croutier, Jr. 6851 Jericho Turnpike, Suite 250 Syosset, New York 11791 (516) 746-0707 Of Counsel: David Lazer Zachary Murdock William J. Croutier, Jr. Erin N. Mackin 62 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© Word2000 as following: Type. A proportionally spaced typeface was used, as follows: Name of typeface: Times New Roman Point size: 14 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 13,343 according to the word- processing software used to prepare the brief. Dated: Melville, New York January 19, 2017 Respectfully Submitted, LAZER, APTHEKER, ROSELLA & YEDID, P.C. Attorneys for Defendant-Appellant LONG ISLAND POWER AUTHORITY By: David Lazer 225 Old Country Road Melville, New York 11747 (631) 761-0810 63 HAMMILL, O’BRIEN, CROUTIER, DEMPSEY, PENDER & KOEHLER, P.C. Attorneys for Defendant-Appellant NATIONAL GRID ELECTRIC SERVICES LLC i/s/h/a KEYSPAN ELECTRIC SERVICES, LLC By: William J. Croutier, Jr. 6851 Jericho Turnpike, Suite 250 Syosset, New York 11791 (516) 746-0707