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Will lawyer for ESDC remain disqualified? Tough to tell

So I was out of town and missed the state appeals court hearing last Thursday in which the Empire State Development Corporation (ESDC) challenged the disqualification of attorney David Paget because he had worked on the Atlantic Yards project for developer Forest City Ratner before switching to the state agency.

But the press coverage indicated that it was a lively, and inconclusive hearing, with judges offering skeptical reactions to arguments from both the ESDC and the community groups and individuals that sought Paget's disqualification. The New York Observer, handicapping the court, gave the edge to the ESDC, suggesting that two judges leaned in the agency's direction, while the other three were harder to read. The New York Sun, in a 3/24/06 article headlined Judges To Decide if Agency Can Rehire Lawyer Banned From Atlantic Yards Project, noted:
One judge said Mr. Paget’s dual roles gave the appearance of impropriety but on a deeper level might not be a conflict of interest. Another judge said the more appropriate forum for a challenge by opponents would come after the state’s decision.

Inherent problem in statute?

Mary Campbell Gallagher, in her Big Cities Big Boxes blog, interpreted the judges' questions as favoring the ESDC, but concluded that the environmental review process is inherently flawed:
By the close of the oral argument, however, the judges appeared to have worked it out in their own minds. First, the members of the citizens' groups in plaintiff Develop Don't Destroy Brooklyn lack standing to bring the suit. Second, even if they have standing, now is not the time to object to Mr. Paget's dual role. If he influences the state wrongly in its dealings with developer Forest City Ratner, plaintiffs can bring an Article 78 action to challenge the final state determination. Needless to say, plaintiffs' counsel found that suggestion impractical.
I believe, however, that the problem is not with who the plaintiffs in this lawsuit are, nor with when they brought their suit. The real problem is with the environmental statutes, which in effect put the fox-developers in charge of the state environmental henhouse. As counsel for the state pointed out yesterday, the statute permits the developer to draft his own environmental impact statement (EIS). The EIS, however, is what the entire environmental regulatory process must examine. Although counsel for the state would doubtless not put it this way, we have environmental statutes that in their very nature positively require a conflict of interest. To enforce the statutes as drafted means to put the developer in control of the state process that is supposed to regulate him. No wonder, then, that in allowing Mr. Paget and his clients to follow the statute, it sounds to a layperson as though there is a conflict of interest.

New counsel

Meanwhile, the ESDC has hired a “provisional counsel” to work on the environmental review of the project--a Draft Environmental Impact Statement (DEIS) is expected within the next weeks or months.

ESDC attorney Douglas Kraus had contended that "there is the distinct possibility that ESDC will not be able to find substitute counsel equivalent to Mr. Paget, since relatively few such counsel exist, and several of them are already engaged as counsel for other parties in the Atlantic Yards matter." As it turns out, ESDC did find such a lawyer, though the agency affirmed that it wanted the court case resolved, and would rehire Paget: "Mr. Paget remains ESDC's counsel of choice."


The legal papers filed indicate a fierce argument over whether various parties could intervene in the case, with the ESDC resisting such "friend of the court" applications. The filing from Council of Brooklyn Neighborhoods (CBN), which represented 28 community groups, goes to a fundamental question of whether the Paget-supervised environmental review could be fair.

Jim Vogel, the CBN Secretary, noted in an affidavit in support of the CBN's motion to intervene:
To that end, Amicus also asks that the Court permit the addition to the Record of a letter received by several local politicians from the ESDC denying their request for funding for CBN to retain technical experts in order that CBN, on behalf of the affected communities, can engage meaningfully in the environmental review process....
As the court can see, the ESDC refused the request for funding claiming that, because Sive Paget is an “independent firm retained by ESDC and taking direction from ESDC staff, . . . the review process will be unbiased.” In that the ESDC’s decision not to fund community participation in the environmental review, which would have had to be billed back to the developer, occurred during Mr. Paget’s watch, it is another example of the clear conflict between his role as attorney for both FCRC and ESDC which requires his disqualification.

ESDC, however, asserted that CBN failed to disclose that 11 of the 12 community group petitioners already in the case are already members of CBN and that Daniel Goldstein, both an individual petitioner and a spokesman for Develop Don't Destroy Brooklyn, is on the CBN steering committee. ESDC also argued that "CBN's views are already well-represented by petitioners" and "CBN's arguments are virtually identical to those already made by petitioners."

CBN's Vogel responded that the information about Goldstein was incorrect and argued that the council had a broader mission:
Therefore, while CBN’s member organizations may hold a position on the proposed development, CBN is attempting to provide a community voice in the environmental review process. CBN as an organization has but one purpose and one goal – to insure that the community is able to participate significantly and meaningfully in the environmental review process of any proposed project over the Vanderbilt (Atlantic) Railyards. CBN’s role in the process has been recognized and supported by not only the 28 organizations which are its members, but by many elected politicians who have publicly called for funds for CBN to retain experts to review the Draft Environmental Impact Statement, when it is released.
ESDC is correct that CBN does share an interest with the petitioners herein; however, the interest that it shares is the public interest in fairness and transparency of the environmental process, something that ESDC is mandated to effectuate.
...Moreover, not only is CBN not an alternate ego of the petitioners, but CBN considered whether or not to become petitioners in the proceeding below, and decided against it, in large part because of the public perception it could have created that CBN, as an organization, opposes the project. However, once ESDC filed its appeal of a decision in which the lower court held that the involvement of Mr. Paget 'has such a severe crippling appearance of impropriety on a project of such great magnitude”, CBN’s membership felt it was bound by its mission to participate in defending the lower court’s finding in order to protect the integrity of the process in which it is CBN’s mission to participate.


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