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Criminal Justice

Litigation Over World Trade Center Clean-Up Payments


Within hours after the collapse of the World Trade Center towers, the New York City Department of Design and Constructionagreed with four main contractors to begin the daunting clean-up. Due to the severity of the situation the department was unable to follow its typical construction contract guidelines. Most importantly, the department did not sign a written contract setting prices for how much money it would pay the contractors and their subcontractors for the work. To date, the department and the four main contractors have not inked a final contract as several issues, including liability insurance, remain in dispute.

When clean-up of the site ended on May 30, 2002, the department began reviewing subcontractors’ invoices and bills for the work they had already done and amounting to over $650 million. Without a written contract setting specific prices for specific jobs, the department is left to determine which bills to pay and at which rates. As the department determines that a particular invoice is excessive and decides not to pay the invoice, there no doubt promises to be subcontractors who will challenge that determination. In what may be the first of many to come, on April 29, 2003 New York County Supreme CourtJustice Diane S. Lebedeff decided that the department has the authority to review and reduce invoices that it deems excessive.

Subcontractor Submitted High Invoice

Tully Construction, Co., one of the four main contractors, had been working on a major State Department of Transportation construction project on lower Route 9A (West Street) on September 11th and was one of the first at the site. Tully, like all of the main contractors, entered into agreements with subcontractors for equipment. One of those agreements was with Massachusetts-based Great Northern Site Corporation for the lease of three (and later four) heavy excavating machines.

Tully and Great Northern agreed that Great Northern would be paid approximately $189 per hour per machine, amounting to approximately $100,000 per machine per month.

Shortly after the machines were delivered to the site, Tully and Great Northern agreed that the rates for the excavating machines would be subject to the Department of Design and Construction’s approval.

By June 2002 the department had issued two memos stating that subcontractors would be paid for their work at a rate of 75 percent of the rate found in the construction industry’s standardized suggested price index, the “Rental Rate Blue Book for Construction Equipment.” The Department would only pay above 75 percent of the Blue Book rate if the subcontractor could provide documentation indicating that the rate was “usual and reasonable pre-September 11, 2001.” The policy, the department stated, was to prevent “’opportunities for unscrupulous individuals to enrich themselves’ in the wake of September 11th.”

Great Northern’s charge for each of its machines at $189 per hour rate came in at approximately $45 per hour higher than the Blue Book rate for similar machines. So the department asked Great Northern for proof that it charged as much per hour before September 11th. When Great Northern failed to submit the documents the city had requested, the department reduced the company’s rate to $108 per hour.

Great Northern sued. It claimed the city agency did not have the authority to change the company’s rates, since the equipment was being put to use on property of the Port Authority, which was created by the States of New York and New Jersey. It said it was entitled to a public hearing, because the city had created a new rule.

Justice Lebedeff dismissed Great Northern’s complaint on April 29, rejecting all its arguments. The city had a right to take reasonable steps to make sure it is not overcharged, the judge ruled, and could so on the site owned by the Port Authority because the September 11th attacks “affected an area far beyond the site.”

Controlling The Floodgates

Justice Lebedeff’s decision has the potential to save the city millions of dollars in overpayment and/or fraud. The city is currently reviewing millions of dollars in unreconciled invoices billed from the World Trade Center clean-up. Pursuant to Justice Lebedeff’s decision the Department has the authority to review these invoices and ensure that the city is not overpaying or paying false claims.

In reviewing the invoices the Department has been working with the Department of Investigations and an auditor, KPMG, who will supplement the auditing staff to reconcile paperwork and then provide it to the Federal Emergency Managementbefore the end of the year. Upon FEMA’s review, the city will be reimbursed for its payments.

As the department makes a determination as to the appropriate rate in each of these invoices, there promises to be litigation, which could prolong the end of the clean-up phase and put off the development.

Great Northern Site Corporation v. Department of Design and Construction, Index No. 122546/02 (Lebedeff, J.) (N.Y.Cty.Sup.Ct.) (Apr. 29, 2002).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A Look At Nightclub Mayhem


New Yorkers who think that the city has seen a lot of murders this year are right. Police department statistics(in pdf format) show that 151 people were murdered in the five boroughs between January 1 and April 13, up from 138 over the same period last year. This 9.4 percent year-to-date increase in murders parallels a 6.2 percent increase in rape. The city has had 561 reported rapes so far this year, up from 528 last year. Other major crimes have declined: felonious assault is down 9.8 percent through mid-April, and burglary and grand larceny auto are both down 15.2 percent. The rise in murder is particularly worrisome to analysts, however, because it is the one crime that everyone agrees to be recorded accurately.

MURDER UP

It has been a murderous few weeks. February 8 was the first night of a murder spree that killed four men (a fifth was wounded) in Brooklyn and Queens. Saying he had targeted Middle Easterners to avenge September 11, a Brooklyn man confessed and was indicted on multiple counts by a grand jury on April 11. On April 13, Dana Blake, a bouncer at Guernica on Avenue B, was stabbed to death after a melee involving smokers. A Guernica patron confessed, and has been charged. On April 24, Lyric Benson, a beautiful, 22-year-old aspiring actress, was shot to death in front of her apartment by her former fiancé as her mother, who had opened the door for her, looked on in horror. The fiancé then turned the gun on himself.

In the early morning of April 25, a rap star and his entourage got into a violent argument with a car full of apparent strangers following a traffic accident outside Centro-Fly, a hip-hop club at 45 West 21st Street. Rapper Freaky Zeeky was shot twice and run over by a car. His bodyguard was killed. "This has nothing to do with rap," a man who called himself a close friend toldthe New York Times. "Just two groups of men who got into trouble."

But the two groups of men got into trouble because they had driven to Chelsea to go clubbing.

NEW YORK'S TROUBLED NIGHTLIFE

Residents of Chelsea have complained for years about the proliferation of nightclubs in their neighborhood. Even as many notorious clubs have been shut down, the hip-hop clubs that have opened around the Flatiron Building have added new problems to the old. Certainly the mix of alcohol, drugs, and late-night partying is volatile, and few neighborhoods want drug- and alcohol-fueled youngsters roaming their streets.

The Bloomberg administration has continued the Giuliani administration's campaign against nightclub violations. After a 22-month drug investigation, the NYPD closed two clubson February 7-the Sound Factory, at 616-620 West 46th Street, and Exit, at 610 West 56th Street.

The police said both clubs had flourishing drug trades, particularly in Ecstasy (methylenedioxy methamphetamine or MDMA) and Special K (ketamine), but also in cocaine and marijuana.

Exit was re-opened March 21 by order of a judge, who reprimanded the police for wasting "tremendous resources" on a "less-than-productive probe." The police are very angry, according to the Daily News, the only paper to cover the reopening of the "drug-fueled dens."

But Exit's problems persist. On April 19, one of its patrons was arrested for harassing other patrons. It turned out that he was already facing charges for brutally beating an off-duty New York City police officer at a Jersey City karaoke bar in November. The cop was left paralyzed, according to the Daily News. Police said the arrested patron was strung out on Ecstasy, one of the drugs they had been able to buy so readily during their investigation.

Clubs like Exit that handle 10,000 patrons a weekend are bound to attract trouble, even when they are well run. They need sophisticated security, always a very limited, expensive commodity. Club owners recently asked the Bloomberg administration to allow them to hire off-duty cops, but were rebuffed. As former Tunnel and Limelight owner Peter Gatien once complainedto the New York Press, "The industry is singled out for a standard that no one can live up to. When you have an event at Madison Square Garden, you have 300 cops helping people. At nightclubs, they set roadblocks to ruin your business."

Yet the nightlife industry is crucial both to New York's image and its economy. A 1998 study by Audience Research & Analysis found that music and dance clubs contribute about $2.9 billion yearly to the city's economy, directly employing over 4,700 people. The number of clubgoers-24.3 million annually-exceeds the number of people going to Broadway acts, sports events, the Empire State Building, and the Metropolitan Museum of Art combined. Over a third of clubgoers are from outside New York, and 89 percent of them say that dancing or seeing a band was their main reason for coming to New York.

SMOKING BAN ADS FUEL

Because of the immense difficulties facing anyone trying to get a New York cabaret license, club sites often have multiple lives. Any site that comes with a cabaret license is disproportionately valuable. Thus Guernica, where bouncer Dana Blake was killed, is attempting a new life as a sedate, upscale club. But it is housed in the space that once held Save the Robots, a glamorous but infamous after-hours bar that didn't make it.

Guernica and the club scene in general had plenty of problems before Mayor Bloomberg's smoking ban. Now club and bar personnel are responsible for enforcing a smoking ban under the most trying of circumstances. Many of them don't really believe in it since the ban is causing them loads of trouble, costing them money in business and tips foregone. Income in bars has dropped by 20 percent since the ban went into effect on April 1, says the Economist.

Club owner David Rabin, president of New York Nightlife Association, toldCBS News that "We predicted all of it. We predicted worse, and I think worse is coming."

And now the ban has cost bouncer Dana Blake his life. The three siblings who were first charged with Dana Blake's murder toldpolice that their father was a famous gangster. He had directed a secretive cabal of businessmen involved in drug deals, gambling, extortions and contract killings in Chinatown. He cooperated with federal investigators after being indicted in 1995 for ordering three murders and conspiracy in a fourth. The Manhattan D.A. refused to prosecute the three siblings. One of their friends has since been arrested and charged.

RAPE KEEPS GOING UP

The city has averaged four reported rapes per day since January 1, about 9 percent more than last year. That's the bad news. But the city has also averaged four arrests per day, which is an increase over last year, although NYPD sex crimes chief Susan Morley has not specified by how much. Urged on by Morley and the NYPD, the City Council has submitted a resolution to the state legislature asking it to pass a bill extending or abolishing (Governor Pataki's preference) the 10-year statute of limitations on unsolved rape cases.

The NYPD says it has reviewed two-thirds of the 13,000 rape kits in its backlog, and has produced almost 1,000 DNA matches. Morley says they have matches back to the late 1980s-which will do no good unless the legislature extends the statute of limitations. Surely if ever an extension was needed it is this.

Julia Vitullo-Martin, a long-time editor and writer on urban affairs, is the former director of the Citizens Jury Project at the Vera Institute of Justice. She is now writing a book entitled The Conscience of the American Jury.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mental Health Care For Released Inmates


The city will for the first time provide mental health care for mentally ill inmates after they are released from jail, thanks to an agreement approved by New York County Supreme Court Justice Richard F. Braun on April 2, which comes after a lawsuit filed by mentally ill inmates themselves.

New York City jails yearly house 33,000 mentally ill pre-trial detainees, individuals not convicted or sentenced of a crime. The average stay in jail for these inmates is as long as 43 days.

While in jail, the city provides these inmates with mental health care and treatment. The care ranges from in-jail, outpatient treatment to placement in segregated mental health units or psychiatric wards. The inmates' treatment can include psychotropic medications and individual or group therapy.

Prior to the settlement, the inmates' care and treatment was terminated upon their release. Once released, the inmates were not provided with care, treatment, government assistance, housing referrals or other assistance to make the transition to society.

Instead, the released mentally ill inmates were taken by bus to Queens Plaza subway station between 2:00 and 6:00 am, given a buck, fifty and a roundtrip Metrocard.

In 1999, several of the inmates who were receiving mental health care during their confinement sued to stop this practice on their own behalf and all other mentally ill inmates.

The city fought the suit, using various legalistic arguments. It claimed that the inmates did not have legal standing in which to sue, since, it argued, even if the city was breaking the mental hygiene law, which required treatment and transition upon the inmates' release, only the state attorney general had the right to enforce that law. The city also claimed that the mental hygiene law applied to developmental centers, patients at psychiatric centers or patients at certain psychiatric inpatient services, but not to city jails.

In a curt decision on July 14, 2000, Justice Braun repudiated the city's arguments. Yes, he ruled, mentally ill inmates do have the authority to challenge the city's policy and enforce the mental hygiene law. And, he ruled, enforcing the mental hygiene law to prevent mental illness is a matter of "public concern" applicable to and enforceable by all, including those incarcerated.

The court ordered the city to continue to provide care to all inmates older than 18 suffering from a mental illness, if that inmate is unlikely to survive safely in the community without supervision, has a history of failing to comply with treatment, is unlikely to participate in the recommended treatment, may relapse, and would benefit from assisted outpatient treatment.

Justice Braun rejected the city's argument that the mental hygiene law did not apply to city jails. The state law, and city regulations, Justice Braun found, specifically provided for intervention and transitional services to released inmates at correctional facilities. The city appealed and the Appellate Division, First Department, the state's intermediate appellate court, upheld the decision.

This decision led to a settlement on January 8, 2003 between the parties, which the court approved on April 2nd.

Under the settlement, the city must provide discharge planning for inmates released from custody. Qualifying inmates are entitled to receive a wide range of mental health treatment and services upon release, including medication, referral to programs, substance abuse treatment and case management service. As part of the discharge planning, qualifying inmates also receive help in submitting applications for Medicaid, food stamps, social security, veteran's benefits and other public assistance benefits. The city has also stated that it would, "in most cases," release mentally ill inmates during daylight hours.

The settlement is valid for five years. During that time, two independent monitors, one chosen by counsel for the inmates and one by the city, will oversee the city's compliance. The monitors will report quarterly, develop performance goals and make recommendations.

Justice Braun's bold July, 2000 order should be recognized as the impetus for the settlement and for remedying a dangerous and compassionless policy of releasing mentally ill inmates in the middle of the night with no transitional assistance. The devastating effect the policy had on former inmates is difficult to ascertain, but, as Justice Braun noted in his order the former inmates were simply "return[ing] to the cycle of likely harm to themselves and/or others, through substance abuse, mental and physical health deterioration, homelessness, indigence, crime, re-arrest, and re-incarceration."

The injustice brought about by this policy has now been remedied though an 80-page settlement. The benefits will not only be felt by the individual former inmates, but also by society. Again, quoting Justice Braun's decision "[i]t is not only to the[ inmates'] benefit to provide them with a discharge plan but to that of all of us if such a plan can aid at least some of [the inmates] to become healthier and thus more productive members of society who are not harmful to themselves and/or others."

The case is: Brad H. v. City of New York, Index No. 117882/99 (Braun, J.) (N.Y.Cty.Sup.Ct.) (Attorneys: Christopher K. Tahbaz, Patricia G. Corley, Emily O'Neil Slater, Douglas Lasdon, Raymond H. Brescia, Heather Barr, John A. Gresham, John Beaglehole, Eileen Sullivan, Faune Devlin, Jeffrey K. Powell, for Brad H.; Michael A. Cardozo, Thomas C. Crane, Jeffrey S. Dantowitz, for NYC).

Jonathan Rosenbloom is the associate director of the Center for New York City Law at New York Law School



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