STATEMENT BY CORPORATION COUNSEL SYLVIA O. HINDS-RADIX TO THE CITY COUNCIL IN CONNECTION WITH THE PRELIMINARY BUDGET FOR FISCAL YEAR 2025

March 5, 2024

Good afternoon, Chair Restler and distinguished Members of the Government Operations Committee.  It is a pleasure to come before you to discuss the Law Department’s fiscal year 2025 Preliminary Budget.  I’m joined by First Assistant Corporation Counsel Muriel Goode-Trufant, Managing Attorney Eric Eichenholtz, and Director of Finance Motte Araf.   

The  Law Department represents the City, the Mayor, the City Council, other elected officials and the City’s agencies in all affirmative and defensive civil litigation. As a prosecuting agency, the Department brings proceedings in Family Court alleging violations of criminal laws and represents the People of the State of New York in proceedings filed in Criminal Court to enforce the City’s Administrative Code. Law Department attorneys draft and review local and state legislation, real estate leases, procurement contracts and financial instruments for the sale of municipal bonds. The Department also provides legal counsel to City officials on a wide range of issues such as civil rights, education, intellectual property, land use and environmental policy. The Department’s work embraces all City entities and operations; our impact is tremendous. 

The Department currently has on board approximately 765 assistant corporation counsels and 665 legal support professionals.  We are proud to be a diversity, equity and inclusion leader in the legal profession with approximately 30% of our lawyers ethnically diverse and 58% percent women.

The Law Department plays an important role in enhancing the City’s fiscal strength, providing internal support to agencies and elected officials to ensure legal and ethical compliance and in advocating for the public good.  To better carry out this mission, during the past year, we created two new Divisions within the Law Department:  The Risk Management Division and the Ethics & Compliance Division.

In prior years, I testified before this Committee about the important work of what was then the Tort Division’s Risk Management Unit working with all City agencies to mitigate or eliminate risks to City residents, both short-term by identifying dangerous conditions that can be remediated quickly and long-term by identifying agency operations or practices that are often the subject of litigation to discuss possible changes. This past year, we expanded this unit into its own Division of the Law Department, adding staff and resources to focus on this important task. The Risk Management Division meets regularly with City agencies to discuss matters that are frequently the subject of litigation to strategize about possible changes to mitigate risk. As its own Division, the Risk Management Division has expanded its work beyond personal injury matters to risk issues across all legal disciplines. For example, Risk Management attorneys are working with our Labor and Employment Law Division attorneys to create strategies to prevent liability from wage and hour violations. The Risk Management Division is also embedding attorneys in our teams handling cases in which Monitors have been appointed by the courts. Their work will ensure that these costly Monitorships function no longer than is absolutely necessary and provide guidance and counsel to agencies to ensure that the legal issues that lead to these large cases do not recur.

Our Ethics & Compliance Division was created in response to the overwhelming demand for advice and counsel from the Law Department’s Chief Ethics Officer from within the Law Department as well as throughout the City government on matters of legal ethics, representation and conflicts of interest, as well as a demonstrated need for additional resources to be placed on compliance matters. In addition, the Law Department separately handled various federal compliance matters including counseling and litigation of False Claims Act matters concerning the City’s compliance with the terms of federal grants. Additionally, the Law Department required new expertise and resources to meet new obligations in supporting the five District Attorneys’ Offices and the Special Narcotics Prosecutor’s Office who have requested representation for their staff members in connection with proceedings before the newly formed Commission on Prosecutorial Conduct.  

The Ethics and Compliance Division was created to better conduct this important work, as well as create new measures to ensure compliance by City agencies with local, state and federal requirements which require monitoring, advisories, and reminders that were  not currently in place within City government prior to the creation of this Division.  The creation of this Division also achieves cost savings – for instance, after shadowing outside counsel for approximately 9 months, the Division is now capable of representing prosecutors and attorneys in grievance proceedings, eliminating the need to hire outside counsel at significant additional cost to provide the defense of these individuals.

The Law Department plays a significant role in securing funds for the City and protecting the public good.  For example, through the work of our Affirmative Litigation Division, in the first half of this fiscal year we recovered over $30 million dollars for the City and City entities. This includes monetary recoveries for unpaid cigarette taxes, property damage, breach of contract, idling violations, tenant protection, false claims act cases, securities fraud, anti-youth vaping, and opioids settlement payments, among other things. In addition, Collections law firms supervised by the Law Department recovered another $10 million.

In addition to these financial recoveries obtained to compensate for violations of the City’s rights, our Affirmative Litigation Division continued in this Fiscal Year, to pursue civil enforcement actions for the protection of public health and safety.  We continue to litigate against cigarette traffickers, sellers of flavored electronic cigarettes or “vapes,” and marketers of e-cigarettes to youth. There are approximately 50 matters, either in court or under consideration, to compel compliance by landlords and building owners with code requirements designed to protect tenants and the public; in December, we reached our first million dollar settlement with the owner of eight properties in Manhattan, who agreed to a corrective action plan.  We continue to litigate against car manufacturers Kia and Hyundai, who decided to omit from certain car models the industry standard anti-theft immobilization devices, forcing law enforcement to respond to surging levels of auto thefts, with thieves participating in a viral TikTok “challenge.”  As you are aware, we just filed a suit on behalf of the City, the NYC Department of Education and NYC Health + Hospitals to hold social media platforms accountable for their contribution to the youth mental health crisis facing the City.  We also settled the first pattern or practice lawsuit under the City’s “Freelance Isn’t Free Act”, enforcing compliance with the nation’s first law protecting freelance workers, and recovering double damages for freelancers who were not paid.  

We also anticipate saving the City over $100 million dollars this Fiscal Year in payouts from the judgment and claims fund through our continuing activity to compel insurance companies to defend and indemnify the City.  In these cases, we are enforcing coverage for lawsuits arising out of the work performed by private contractors and permittees.  Every case that the insurance company steps up to defend is a case that does not have to be defended by city attorneys, thus saving enormous legal resources.  Settlements and judgments paid by insurers in cases falling within the policy coverage also save the City substantial sums.  This past year, the Affirmative Litigation Division achieved a milestone – passing more than two and a half billion dollars saved since the start of the program in the 1990s. 

A further example is our Commercial and Real Estate Litigation Division, which defends the City in a wide range of contractual disputes.  These disputes include three categories of agreements: contracts with private companies to build or repair the City’s infrastructure; leases of important public properties; and contracts for all types of goods and services.  These claims are largely based upon negotiated terms of pre-existing agreements and typically involve significant exposure to the City.  In FY23, the Division saved the City $50 million by resolving $150 million dollars in claims for $100 million. Similarly, our Tax & Bankruptcy Division’s defense of real property tax assessments protected $91 Million in property tax receipts in FY23 and almost $30 Million during the first half of FY24.

A large focus of our work this year was to ensure the City could adequately respond to the influx of asylum seekers arriving in our City.  Lead by our executive team, a multi-disciplinary group of attorneys from across several Law Department divisions, provided critical and timely legal advice. The work of this dedicated group of attorneys from Divisions such as Legal Counsel, Affirmative Litigation, General Litigation, Contracts and Real Estate, Administrative Law and Regulatory Litigation enabled the City to respond to this crisis lawfully and cognizant of applicable laws and rules.   The team also litigated myriad matters that arose in order to represent the City’s interests in court.  A good example of this work was the efforts of our Affirmative Litigation Division, which was tasked with litigating (and continuing to litigate) in upstate counties and towns to defend the City’s ability to use available upstate hotel rooms for temporary housing assistance for asylum seekers, ensuring the City was not limited  in our ability to  manage this crisis.

As you are likely familiar, our office also works side by side with Council attorneys crafting local laws and then defending those laws if and when they are challenged. 

All of this work is in addition to our efforts to defend the City and its employees in litigation in more than 70,000 cases annually.  We have experienced an increase in pending cases, particularly in our largest division, Tort, where there are now more than 31,000 pending cases. Included in the number of pending cases, are long-standing cases, COVID-19-related cases, and newly filed Adult Survivor Act and  Child Victims Act cases.

The Tort caseload remained steady this year due to our efforts, to employ new strategies to efficiently address case backlog, despite budget constraints.  For example, for years, tort cases involving the Department of Transportation have been hampered by the need to, at great personnel cost, search myriad databases maintained by the agency to locate and provide relevant material for discovery.  Working with the Law Department, DOT has implemented a system called Universal Legal Search, ULS.  ULS can search across DOT’s databases to extract and pull relevant material for discovery production in a far more efficient manner.  We anticipate that ULS will allow the Tort Division to significantly reduce a backlog of discovery motions, including motions to strike the City’s answer in cases in which the City otherwise has a meritorious defense. 

We continue to pursue this and other innovative strategies, with other agencies, to manage the workload across all of our divisions in the face of the increased workload and emerging legal challenges, but fear that the unprecedented level of attrition of ACCs and support professionals may outpace our mitigation efforts. For example, we continue to see an erosion of resources previously provided to the Tort Division that enabled us to improve case outcomes through increasing early settlements, engaging in better case preparation, and enhancing our state court trial practice.  As the City’s fiscal condition improves, we look forward to working with the Office of Management and Budget and the Council to restore resources to successful initiatives and identify new initiatives that will allow the Law Department to more effectively carry out its mission.

The Family Court Division is the second largest and the only prosecutorial Division in the Law Department.  All of the work of the Division is geared toward strengthening youth, families and communities.  Its mission is two-fold: through Juvenile Justice and Interstate Child Support. We are the presentment agency for all Juvenile Justice, Adolescent Offender and Interstate Child Support cases referred to the NYC Family Courts. Under the rehabilitative mandate of the Family Court Act, the Family Court Division must work to achieve outcomes that serve the needs of each individual youth brought before the court, while at the same time, protecting the interests of crime victims and ensuring the safety of the community at large. However, these matters require resources similar to those prosecutorial agencies such as the District Attorneys.  Our Family Court Attorneys work in approximately 30 locations, 365 days and nights a year including nights, weekend, and holiday operations.

The amount of serious matters handled by the Division continues to rise.  New York City continues to experience a significant increase in violence around firearms cases. The number of firearms cases handled by the Division is at an all-time high. In 2017, the Division handled 39 firearms cases citywide.  In 2022, 384 firearms cases were referred to and investigated by the Family Court Division, and in 2023 that number reached 415.  Thankfully, the number of homicide referrals has decreased from 8 in 2022 to 2 in 2023. However, the number of Juvenile Justice case referrals increased by 51.8% from 3814 in 2022 to 5,790 in 2023;  73%  of which involved felony charges.  Despite the increased complexity of the cases and challenges regarding evolving technology and attrition; with the exception of the first year of the pandemic (2020), the Division has maintained a conviction rate of over 70% reaching 77% in 2023.   Our Child Support case referrals also increased by 9.68% from 1870 in 2022 to 2051 in 2023. 

The goal for youth in Juvenile Justice is to identify strengths as well as resources  and opportunities to foster success in the community. To do so, our staff members are dedicated to outreach across the five boroughs, attending events in schools and in communities in order for us to meet and support all those who may need our assistance. In Juvenile Justice proceedings, the law requires a determination that balances the needs of the youth and community safety. The vast majority of cases in the Division result in community-based outcomes including diversion and restorative justice. Throughout all matters, we look toward matching youth, families and impacted community members with appropriate services and opportunities geared toward preventing system involvement; providing rehabilitation; securing restorative services and promoting enhanced outcomes for the youth, families and communities in NYC. Our staff is committed to a wholistic approach to these issues.

My testimony today provides a limited survey of the very broad and varied legal work performed by the Law Department. By keeping the interests of all New Yorkers at the center of our work, we can do what is right and reinforce trust in government. And that is our core commitment. 

I thank you for your support of the Law Department and look forward to our continued collaboration. I would be happy to answer any questions you may have.

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