City of New York v. E-J Elec. Installation Co.

City of New York v E-J Elec. Installation Co. 2025 NY Slip Op 30972(U) March 27, 2025 Supreme Court, New York County Docket Number: Index No. 100303/2013 Judge: John J. Kelley Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service.

This opinion is uncorrected and not selected for official publication.

INDEX NO. 100303/2013 NYSCEF DOC. NO. 291 RECEIVED NYSCEF: 03/27/2025

SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. JOHN J. KELLEY PART 56M Justice ---------------------------------------------------------------------------------X INDEX NO. 100303/2013 CITY OF NEW YORK, ex rel. JOSEPH LERMAN MOTION DATE 12/13/2024 Plaintiff, MOTION SEQ. NO. 010 -v- E-J ELECTRIC INSTALLATION COMPANY, DECISION + ORDER ON MOTION Defendant. ---------------------------------------------------------------------------------X The following e-filed documents, listed by NYSCEF document number (Motion 010) 168, 169, 170, 171, 172, 173, 174, 175, 176, 177, 178, 179, 180, 181, 182, 183, 184, 185, 186, 187, 188, 189, 191, 193, 194, 195, 196, 197, 198, 199, 263, 264, 265, 266, 267, 268, 269, 270, 271, 272, 273, 274, 275, 276, 277, 278, 279, 280, 281, 282, 283 were read on this motion to/for RENEWAL .

This is an action, inter alia, pursuant to section 189 the New York False Claims Act (State Finance Law §§ 186-194), in which the relator, Joseph Lerman, sought qui tam relief, on behalf of the City of New York, against the former defendants Siemens AG and Siemens Electrical, LLC (together the Siemens defendants), in connection with electrical work that they performed behalf of the City’s Department of Environmental Protection (DEP) in the course of constructing the Croton Water Filtration Plant (the plant). Lerman moves, for the second time, pursuant to CPLR 2221(e) for leave to renew his opposition to the City’s motion to dismiss the section 189 cause of action that Lerman had asserted against the Siemens defendants (SEQ 008), which had been granted in an order dated July 3, 2019, as amended July 24, 2019 (Madden, J.). In an order dated December 15, 2020, Justice Madden granted Lerman’s first motion for leave to renew, but adhered to her initial determination granting the City’s motion to dismiss (SEQ 009). The instant motion is opposed by the sole remaining defendant, E-J Electric Installation Company (E-J), against whom Lerman presently is litigating a claim in this action pursuant to State Finance Law § 191 to recover for wrongful termination of employment.

100303/2013 CITY OF NEW YORK vs. EJ ELECTRIC INSTALLATIONS Page 1 of 10 Motion No. 010

The instant motion for leave to renew is denied.

As relevant here, Lerman commenced this action on behalf of the City against the Siemens defendants, alleging that, contrary to his own opinion, certain electrical work that they proposed and approved for the plant, and installed therein, violated the New York City Electrical Code (Admin. Code of City of N.Y. §§ 27-3001-3025; hereinafter NYCEC) and, thus, that they engaged in deceptive and dangerous practices and charged the DEP for improper work that needed revision. The DEP entered into a contract with the Siemens defendants for work at the plant, for which the cost of all construction by all involved trades exceeded $3.3 billion.

According to E-J, the Siemens defendants initially were joint venturers with Schlesinger Electrical Contractors (SEC), but eventually replaced SEC with E-J, first as a consultant, and later as a subcontractor, to assist them with the work. E-J had hired Lerman in October 2010 to serve as a project manager overseeing electrical work at the plant, and Lerman alleged, in his amended complaint, that his “primary role on the project was to review the high voltage installation of the Croton Plant, identify weaknesses or violations, prepare estimated budgets for corrective work, and ultimately make a recommendation to EJ and Siemens’ management.”

As part of his job responsibilities, Lerman came upon what he believed to be a potential violation of the NYCEC, explaining that the NYCEC prohibited two 5,000-volt cables from sharing the same junction box, apparently premising his concerns on an NYCEC provision that applied only to cables with voltages under 600 volts. According to E-J, Lerman later conceded that this provision did not apply, and thereafter expressed his concern that the proposed junction box violated another NYCEC provision that addressed only the combination of cables rated for 600 volts or less with cables rated for more than 600 volts. E-J argued that, inasmuch as both of the cables involved were rated for 5,000 volts, that provision also was inapplicable.

E-J further contended that, contrary to Lerman’s opinion, the proposed installation did not violate a NYCEC provision allegedly prohibiting the commingling of primary service feeders, since the cables in issue were not service feeders, and that none of the NYCEC restrictions 100303/2013 CITY OF NEW YORK vs. EJ ELECTRIC INSTALLATIONS Page 2 of 10 Motion No. 010

The City declined to intervene in this action. On or about September 14, 2018, the City moved pursuant to State Finance Law § 190(5)(b)(i) to dismiss the section 189 cause of action.

In the July 3, 2019 order, the court granted the City’s motion and dismissed that cause of action.

In her decision and order, Justice Madden first explained that, generally, judicial interpretation of 100303/2013 CITY OF NEW YORK vs. EJ ELECTRIC INSTALLATIONS Page 3 of 10 Motion No. 010

Justice Madden concluded that it was irrelevant as to which standard she needed to apply, since the City here satisfied the less-deferential rational relation test by establishing the “tenuous merit” of Lerman’s claim and its interest in preserving taxpayer resources arising from the ongoing litigation. With respect to the merits of Lerman’s claim, she determined that “the City has investigated the allegations asserted in the Relator’s original complaint and First Amended Complaint that the electrical system at the Croton Plant violated that NYCEC, and has provided affidavits attesting to compliance with applicable Code requirements. Specifically, with respect to the Code provisions cited in the First Amended Complaint at issue here, the City provides [an] affidavit that NYCEC § 708.10(b), concerning critical operation power systems (‘COPS’) does not apply since the Croton Plant did not receive a COPS designation from DEP; that § 700.12(D), concerning emergency power systems[,] has no application since the Croton Plant is not fed by an additional service facility, and that 408.60(E)(2), concerning minimum capacity of certain busbars, does not bear on the commingling of cable or pull boxes. As for the contract requirements, the Klavansky affidavit submitted by the City states that the only commingling of cable is at four medium voltage switch gear units and that such commingling with overcurrent devices that can shut off power is permissible under the contract.”

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Justice Madden thus concluded that the City had demonstrated a rational basis for the dismissal of the section 189 cause of action, and that, in opposition to that showing, Lerman did not submit evidence that the determination was fraudulent, illegal, or arbitrary and capricious. She came to this conclusion because Lerman did not address the opinions rendered by City officials and retained experts with respect to whether there were any NYCEC violations, and that any allegations that the Siemens defendants violated Consolidated Edison Blue Book requirements were explicitly rebutted by Abbassi’s reply affidavit, in which he explained that these requirements applied to equipment outside of and external to the DEP’s electrical substation, while the subject cables and junction box were located inside of the substation.

In the December 15, 2020 decision and order, Justice Madden granted renewal, but adhered to her initial determination to dismiss the section 189 cause of action, explaining that Lerman failed to demonstrate that the City relied upon improper factors in declining to intervene and in moving to dismiss that cause of action. Since December 15, 2020, Lerman and E-J, the two remaining parties, conducted discovery in connection with the cause of action alleging wrongful termination of Lerman’s employment. In 2022, they engaged in mediation in an attempt to settle the wrongful termination cause of action. On July 30, 2024, Lerman filed a note of issue and certificate of readiness. On September 24, 2024, E-J moved for summary judgment dismissing that cause of action.

On September 26, 2024, Lerman made the instant motion, again seeking renewal of his opposition to the City’s motion to dismiss the section 189 cause of action, and requested this court thereupon to deny the dismissal motion, reinstate that cause of action, and restore the Siemens’ defendants as parties to the action.

A motion for leave to renew “‘shall be based upon new facts not offered on the prior motion that would change the prior determination or shall demonstrate that there has been a change in the law that would change the prior determination’” (McLaughlin v Snowlift, Inc., 214 AD3d 720, 721 [2d Dept 2023], quoting CPLR 2221[e][2]; see Melcher v Apollo Med. Fund Mgt., 100303/2013 CITY OF NEW YORK vs. EJ ELECTRIC INSTALLATIONS Page 5 of 10 Motion No. 010

LLC, 105 AD3d 15, 23 [1st Dept 2013]; Dinallo v DAL Elec., 60 AD3d 620, 621 [2d Dept 2009]; American Audio Serv. Bur. Inc. v. AT & T Corp., 33 AD3d 473, 476 [1st Dept 2006]). E-J has established that the motion should be barred by the doctrine of laches, and the court concludes that that so much of Lerman’s motion as was premised upon an alleged change in law was untimely under CPLR 2221(e)(2). In any event, the plaintiff failed to demonstrate the existence of any new facts or any change in the law that would have changed the court’s initial determination of the City’s motion.

Although the CPLR generally does not articulate any specific deadline for making a motion for leave to renew, where, as here, the basis for the renewal motion is an alleged change in the law, the motion must be made prior to the entry of a final judgment in the action, or before the time to appeal from an adverse order has fully expired (see CPLR 2221[e][2]; Wilmington Trust N.A. v Fife, 212 AD3d 550, 550-551 [1st Dept 2023] [“Plaintiff’s renewal motion was made after its time to appeal from the January 29, 2020 order granting defendant summary judgment dismissing the complaint had lapsed”]; Matter of 160 E. 84th St. v New York State Div. of Hous. & Community Renewal, 203 AD3d 501, 501 [1st Dept 2022]; Daniels v Millar El. Indus., Inc., 44 AD3d 895, 895 [2d Dept 2007]). On July 24, 2019, the Siemens defendants served Lerman with a copy of the order dated July 3, 2019, as amended July 24, 2019, with notice of entry. Hence, Lerman’s time to appeal from that order expired on August 23, 2019 (see CPLR 5513[a]; General Construction Law § 20). The instant renewal motion was made on September 26, 2024 and, thus, long after Lerner’s time to appeal from the order granting defendant summary judgment dismissing the complaint had lapsed. Hence, to the extent that the instant motion seeks renewal based on a change in law, it must be denied as untimely.

With respect to Lerman’s contentions that “new facts” not submitted in opposition to the City’s motion or in support of his first renewal motion underpin the instant renewal motion, the court recognizes that “[m]ere lateness is not a barrier to” moving for leave to renew. “It must be lateness coupled with significant prejudice to the other side, the very elements of the laches 100303/2013 CITY OF NEW YORK vs. EJ ELECTRIC INSTALLATIONS Page 6 of 10 Motion No. 010

Nor does the court discern any basis for granting leave to renew in the interest of justice (see Onglingswan v Chase Home Fin., LLC, 104 AD3d at 544), particularly because Lerman failed to establish that the facts not previously presented to the court would change the outcome of Justice Madden’s determinations, or that there actually has been a change in law that requires a decision contrary to hers.

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Contrary to Lerman’s contentions, the United States Supreme Court’s determination in United States ex rel. Polansky v Executive Health Resources, Inc. (599 US 419 [2023]), did not effectuate a change in the standards under New York law for the government’s right to dismiss a qui tam action over a relator’s objections. In State of New York ex rel. Walsh v Dayan (2022 NY Slip Op 31966[U], 2022 NY Misc LEXIS 10989 [Sup Ct, N.Y. County, Jun. 27, 2022]), the court, citing Sequoia Orange Co. and Swift, essentially reiterated and approved of Justice Madden’s analysis in this action. The Walsh decision articulated the parameters of the less- deferential “rational relation” test as follows: “[A] court first analyzes whether any ‘evidence [was presented] that the defendant[ ] engaged in bribery, fraud, or coercion, or otherwise conspired with the government to dismiss the qui tam action[ ] for improper reasons’ (Sequoia, 151 F3d at 1146), or, in other words, that the relator ‘failed to establish that the government's prosecutorial judgment was arbitrary and capricious, illegal, or fraudulent’ (Swift, 318 F3d at 254). Second, a court evaluates the financial burden of litigating a particular claim: ‘the government can legitimately consider the burden imposed on the taxpayers by its litigation, and that, even if the relator [ ] were to litigate the FCA claims, the government would continue to incur enormous internal staff costs.’ Sequoia, 151 F3d at 1146. Sequoia concluded that the government could ‘dismiss a meritorious qui tam action over a relator’s objections [w]here . . . the government offers reasons for dismissal that are rationally related to a legitimate government interest.’ Id. at 1147. Thus, Sequoia notes that ‘“[i]t is not clear whether in practice this notice and hearing requirement has amounted to much of a hurdle for the government.”’ Id. at 1144 (alteration in original) (quoting Kelly, 9 F3d at 753 n 11)” (id., 2022 NY Slip Op 31966[U], *7-8, 2022 NY Misc LEXIS 10989, *10-11). In Polansky, the United States Supreme Court essentially adopted the “rational relation test,” holding that a governmental entity’s motion to dismiss a federal False Claims Act complaint should be denied in only “the most exceptional cases” (United States ex rel. Polansky v Executive Health Resources, Inc., 599 US at 437), and that the motion court “should think several times over before denying a motion to dismiss” (id. at 438). Crucially, the high Court explained that, “[i]f the Government offers a reasonable argument for why the burdens of continued litigation outweigh its benefits, the court should grant the motion. And that is so even if the relator presents a credible assessment to the contrary” (id.). This is not “new” law, but simply a clarification that 100303/2013 CITY OF NEW YORK vs. EJ ELECTRIC INSTALLATIONS Page 8 of 10 Motion No. 010

Lerman’s reliance upon Loper Bright Enters. v Raimondo (603 US 369 [2024]) is completely misplaced. In that decision, the United States Supreme Court overruled long- standing precedent applying so-called “Chevron deference” to federal agencies (Chevron, U.S.A., Inc. v Natural Resources Defense Council, Inc., 467 US 837 [1984]), and determined that, in actions for judicial review pursuant to the federal Administrative Procedure Act (5 USC §§ 551, et seq.), federal courts need not give deference to federal agencies’ interpretations of federal statutes, notwithstanding their specific technical or scientific expertise. That decision did not involve the federal False Claims Act, which, according to the Polansky decision issued only one year earlier, still required deference to governmental entities who sought to dismiss qui tam actions. Moreover, New York courts are not bound to apply, to the New York Constitution, the United States Supreme Court’s interpretation and application of federal separation of powers doctrine under the United States Constitution. Rather, this State’s Court of Appeals has steadfastly held that, “[w]hile agency interpretations of their own regulations are generally 100303/2013 CITY OF NEW YORK vs. EJ ELECTRIC INSTALLATIONS Page 9 of 10 Motion No. 010

Lerman’s remaining contentions are without merit.

Accordingly, it is, ORDERED that the motion is denied; and it is further, ORDERED that the defendant E-J Electric Installation Company is awarded motion costs in the sum of $100.00 (CPLR 8202), to be paid by the relator, Joseph Lerman.

This constitutes the Decision and Order of the court.

3/27/2025 $SIG$ DATE JOHN J. KELLEY, J.S.C. CHECK ONE: CASE DISPOSED X NON-FINAL DISPOSITION

□ GRANTED X DENIED GRANTED IN PART OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER

□ CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE

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