Court of Appeals January Session: Arguments of Interest for January 9, 2018

The Court of Appeals is back for the final week of the January Session. There are only two days of argument this week, and three cases are on the docket today (the Court’s case summaries can be found here). The Court will hear arguments on the following issues: (1) whether the Long Island Power Authority is entitled to governmental immunity from tort liability for its failure to shut down the power grid in Queens before or during Hurricane Sandy; (2) does an indenture trustee have standing to enforce all rights of bondholders, or just limited authority to bring actions for payment on or to enforce the terms of the notes; and (3) whether a criminal defendant is denied a constitutional speedy trial where the prosecution delays his trial for six years while trying to obtain the cooperation of a co-defendant.

No. 11     Connolly v Long Island Power Authority
No. 12     Baumann v Long Island Power Authority
No. 13     Heeran v Long Island Power Authority

In these three consolidated cases, about 180 property owners allege that their homes were destroyed or their properties damages by fires caused when the Hurricane Sandy storm surge came into contact with LIPA’s still live power lines. The property owners allege that this damage was foreseeable and, thus, LIPA was negligent in not shutting down the power grid before the storm.

Supreme Court denied LIPA’s motion to dismiss the cases, holding that it was not entitled governmental immunity because running the power grid is an act within LIPA’s proprietary capacity. Power has traditionally been provided by the private section, the Court reasoned, and so LIPA’s actions could not be immune from the negligence suits.

The Appellate Division, Second Department affirmed, with one Justice dissenting. The majority reasoned that LIPA was created by the Legislature as a substitute for what was formerly a private enterprise, and thus its actions in operating the power grid were proprietary, not governmental. As such, the majority held that LIPA was not immune from suit. The dissenter argued, on the other hand, that LIPA is a governmental entity and its preparations for and responses to the hurricane were governmental functions. The mere fact that the power grid used to be operated privately does not eliminate the governmental nature from LIPA’s actions, the dissenter reasoned.

So, what actions can be held to be in a public authority’s proprietary capacity that would subject it to normal tort liability? Are there any at all?  The Court of Appeals will hear arguments on those questions today.

The Appellate Division, Second Department’s order can be found here.


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