The PEOPLE of the State of New York v. NYTAC CORP., Defendant.
NYTAC Corp., a criminal defendant in the above referenced proceeding, moves this Court for an order waiving the requirements of N.Y. CPL § 600.20 for the purpose of allowing the defendant to be arraigned and to participate and defend the action. The People have not interposed opposition to the requested relief.
For all criminal proceedings in the state of New York, corporate defendants are required to appear by counsel, whereas individual defendants can appear pro se. It is the opinion of the Court that the statutory requirement that corporate criminals appear by counsel imposed by N.Y. CPL § 600.20 is unconstitutional, as it denies them equal protection under the law.
1. On April 27, 2004, NYTAC Corp. was issued three summons from the Town of Huntington Department of Environmental Control for allegedly violating § 117-2 B(2) of the Huntington Town Code which prohibits engaging in the collection of solid waste in the township without a permit.
2. NYTAC Corp. appeared by its President on August 4, 2004, who indicated that he wished to be arraigned and to plea bargain with the People for the purpose of resolving the matter. The people notified the Court that a plea agreement had been tentatively arrived at.
3. Both the Court and the People advised the defendant's President that CPL § 600.20 prohibits the arraignment and or disposition of the matter without the defendant's appearance via counsel.
4. The defendant is a small, closely held, private corporation who via its duly authorized corporate officer makes application to the Court to waive the attorney appearance requirement so as to allow for the prosecution and disposition of the matter without an attorney.
Issue Before the Court
This Court is asked to decide whether the statutory requirement that corporate criminal defendants appear with counsel is a violation of the New York State or United States Constitutions? Corporations are artificial entities which can only act through agents. In re Holliday's Tax Services Inc., 417 F.Supp. 182, 183 (E.D.N.Y.1976) (citing 9 Fletcher on Corporations § 4463) (1931, Cum.Supp.1975). The State of New York has enacted statutes for both its civil and criminal court proceedings which require corporations to appear only via a licensed attorney. N.Y. CPLR § 321 and N.Y. CPL § 600.20. The New York State Constitution expressly provides in Art. 10, § 4 that corporations may “sue and ․ be sued in all courts in like cases as natural persons.” The Court of Appeals has determined that the requirement of corporate appearance only by an attorney in a civil proceeding does not violate this section of the New York State Constitution. See Oliner v. Mid-Town Promoters, Inc., 2 N.Y.2d 63, 64, 156 N.Y.S.2d 833, 138 N.E.2d 217 (1956) (construing predecessor statute, New York Civil Practice Act § 236).1 The Court of Appeals did not address the issues of whether the statute violates the Federal Constitution or other provisions of the New York State Constitution.
Statute Under Review
New York's criminal procedure statute governing corporate defendant's appearance by attorney provides:
§ 600.20 Corporate defendants; prosecution thereof
At all stages of a criminal action, from the commencement thereof through sentence, a corporate defendant must appear by counsel. Upon failure of appearance at the time such defendant is required to enter a plea to the accusatory instrument, the court may enter a plea of guilty and impose sentence.
The threshold issue to be addressed is whether corporations receive any additional protections in a criminal verses a civil proceeding? The Court points to the “presumption of innocence” and the “burden of proof”, both of which are jeopardized when corporations are essentially forced to plead guilty when they appear without an attorney. Under § 600.20, a corporate defendant without an attorney unequivocally loses the right to defend itself. The defacto statutory imposition of a guilty plea creates the forfeiture of the benefit of the “presumption of innocence.” For a definition of the presumption and its role in the courts, see People v. Patterson, 78 N.Y.2d 711, 716, 579 N.Y.S.2d 617, 587 N.E.2d 255 (1991). Consequently, also put at risk is the requirement that the People bear the burden of establishing the defendant's guilt “beyond a reasonable doubt”. For a discussion of the burden, see In re Raquel M., 99 N.Y.2d 92, 95 96, 752 N.Y.S.2d 268, 782 N.E.2d 64 (2002). Are these rights not fundamentally protected concepts? This Court believes they are, and will utilize the same as the justification to review the constitutionality of this statute in a criminal context as it relates to the Federal Constitution's requirement of “equal protection” under the law.
Equal Protection Analysis
The Fourteenth Amendment of the United States Constitution provides:
No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws. Emphasis Added.
When the constitutionality of a statute is challenged under the equal protection clause, the statute at issue is subject to one of two forms of analysis. See Alevy v. Downstate Med. Ctr., 39 N.Y.2d 326, 332, 384 N.Y.S.2d 82, 348 N.E.2d 537 (1976) (discussing the “[t]raditional equal protection analysis”). If the statute appears to discriminate against a “suspect” class or infringe upon a “fundamental” right, the statute is subject to a “strict scrutiny” analysis. See id. A statute under this form of review is upheld only if it furthers a “compelling [s]tate interest.” See id. (citing Loving v. Virginia, 388 U.S. 1, 87 S.Ct. 1817, 18 L.Ed.2d 1010 (1967)).
When neither the discrimination of a suspect class nor the infringement upon a fundamental right is at issue, a statute challenged under the equal protection clause is subject to a “rational-basis” analysis. See Heller v. Doe, 509 U.S. 312, 319, 113 S.Ct. 2637, 125 L.Ed.2d 257 (1993). Statutes under this form of review are “accorded a strong presumption of validity.” See id. Any classification that appears discriminatory is constitutional so long as there exists a “rational relationship between the disparity of treatment and some legitimate governmental purpose.” See id. at 320, 113 S.Ct. 2637. Additionally, it is not necessary for the legislature to set forth its reasons for creating a discriminatory classification so long as there exists a “reasonably conceivable” rationale for such classification. See id. A statute fails the rational basis analysis if its discriminatory classification bears no relation to the state's objective. See id. at 324, 113 S.Ct. 2637 (quoting Holt Civic Club v. Tuscaloosa, 439 U.S. 60, 71, 99 S.Ct. 383, 58 L.Ed.2d 292 (1978) (quoting McGowan v. Maryland, 366 U.S. 420, 425, 81 S.Ct. 1101, 6 L.Ed.2d 393 (1961))). Stated differently, a statute is unconstitutional if its discriminatory classification is found to be arbitrary. See Trump v. Chu, 65 N.Y.2d 20, 25, 489 N.Y.S.2d 455, 478 N.E.2d 971 (1985).
The Supreme Court of the United States has ruled that corporations are “persons” under the equal protection clause of the Constitution. See Santa Clara County v. Southern Pacific Railroad Co., 118 U.S. 394, 396, 6 S.Ct. 1132, 30 L.Ed. 118 (1886). Consequently, when examining the constitutional rights of corporations, it is appropriate to view corporate entities, not as akin to persons, but as persons.
It is settled that defendants in criminal proceedings have a right to defend pro se. See Faretta v. California, 422 U.S. 806, 817, 95 S.Ct. 2525, 45 L.Ed.2d 562 (1975). The Supreme Court has reiterated that this right is indeed “ “fundamental.” See Martinez v. Court of Appeal of California, Fourth Appellate District, 528 U.S. 152, 161, 120 S.Ct. 684, 145 L.Ed.2d 597 (2000) (“ “[T]he right to defend oneself at trial is ‘fundamental’ in nature”) (citing Faretta, 422 U.S. at 817, 95 S.Ct. 2525). In Faretta, the Supreme Court ruled that states cannot “constitutionally hale a person into its criminal courts and there force a lawyer upon him, even when he insists that he wants to conduct his own defense.” 422 U.S. at 807, 95 S.Ct. 2525.2 This right is predicated upon basic principles of justice inherited from English tradition, prevalent throughout the history of the American legal system. See generally, id. Today, this right is embodied in the Sixth Amendment of the U.S. Constitution, as well as Art. 1, § 6 of the New York State Constitution and N.Y. CPL § 170.10, subd. 6. See id. at 819, 95 S.Ct. 2525 (“Although not stated in the [Sixth] Amendment in so many words, the right to self-representation to make one's own defense personally is thus necessarily implied by the structure of the Amendment.”); People v. McIntyre, 36 N.Y.2d 10, 15, 364 N.Y.S.2d 837, 324 N.E.2d 322 (1974) (stating that “the New York State Constitution and criminal procedure statute clearly recognize” the right to defend pro se).3 The Court acknowledges that in New York this right is subject to limitation. See McIntyre, 36 N.Y.2d at 17, 364 N.Y.S.2d 837, 324 N.E.2d 322.
A defendant in a criminal case may invoke the right to defend pro se provided: (1) the request is unequivocal and timely asserted, (2) there has been a knowing and intelligent waiver of the right to counsel, and (3) the defendant has not engaged in conduct which would prevent the fair and orderly exposition of the issues. Id. None of these limitations, however, apply to the case before the Court.
Applying the matter at issue to a strict scrutiny analysis, the Court fails to find any compelling state interest achieved by forcing a particular class of persons, corporations, to appear by counsel. Interests held to be “compelling” have been in the nature of perceived threats to national security. See Alevy, 39 N.Y.2d at 333, 384 N.Y.S.2d 82, 348 N.E.2d 537 (citing Korematsu v. United States, 323 U.S. 214, 65 S.Ct. 193, 89 L.Ed. 194; Hirabayashi v. United States, 320 U.S. 81, 63 S.Ct. 1375, 87 L.Ed. 1774). A corporation defending pro se is in no way akin to a threat to the security of the state. That no compelling interest is served by forcing corporate defendants in criminal cases to appear by counsel is further evidenced by the fact that the general rule has been relaxed somewhat in civil cases. N.Y. CPLR § 321.
The Court points out the arbitrary nature of N.Y. CPL § 600.20 to show that the statute would be unable to pass even the less rigorous rational basis test. Inconsistencies regarding the rights of corporations are apparent throughout the laws of this state. As stated above, the extent of a corporation's right to defend pro se varies significantly between civil and criminal cases. Whereas a corporate defendant in a criminal case must appear by counsel or risk default, the legislature has allowed corporations to appear and prosecute and defend pro se in a limited class of civil cases. N.Y. CPL § 321. Corporations can bring a commercial claims action without counsel. N.Y. UDCA § 1809 A(d). They can also be sued in small claims court, and are allowed to appear by “any authorized officer, director or employee.” N.Y. UDCA § 1809(2) and § 1815. Further evidence of this inconsistency is that in civil matters, a plaintiff corporation which is required to appear by attorney, can assign its claim to “circumvent” the general rule that it must appear by counsel. See Traktman v. City of New York, 182 A.D.2d 814, 815, 582 N.Y.S.2d 808 (2d Dept.1992).
Courts have proffered various rationales for requiring corporate defendants to appear by counsel and the consequences of this rule. It has been said that corporations cannot appear pro se because they are “fictional persons with limited liability,” and that they require representation by counsel so that a court has a party to “hold accountable.” See Toren v. Anderson, Kill & Olick, P.C., 185 Misc.2d 23, 26, 710 N.Y.S.2d 799 (Sup.Ct., N.Y. County 2000). To account for the distinction between individuals and corporations in the CPL, the Queens County Criminal Court has stated that it “appears based on the fact that a corporation appears through counsel and is not exposed to the same threat to liberty.” See People v. Flushing Hosp. & Med. Ctr., 122 Misc.2d 260, 273, 471 N.Y.S.2d 745 (Crim. Ct., Queens County 1983). According to the New York County Criminal Court, “the disparate treatment of corporate and individual defendants as regards guilty pleas may be explained by the fact that corporations are not subject to the loss of liberty or stigma of a criminal conviction.” See People v. Erin Construction Corp., 136 Misc.2d 807, 812, 519 N.Y.S.2d 466 (Crim. Ct., N.Y. County 1987).
The reasons given above for subjecting corporations to different standards appear to be good faith attempts to rationalize a wholly arbitrary rule. When a corporation is guilty of a crime or liable for a civil wrong, the corporation itself is held accountable. It is responsible for paying the fines it owes, and its assets can be used as a source of collateral. Moreover, like individuals, when a corporation is found guilty of a crime, it is subject to public condemnation and risks gaining a negative reputation. In any event, the fact that the State Legislature itself has determined the need to dispense with its rational for requiring corporate attorneys on repeated instances indicates that the purpose of N.Y. CPL § 600.20 is not absolute, and that the separate corporation classification serves at best a questionable government purpose.4
In sum, corporations have a fundamental right to defend pro se by an officer in a criminal proceeding. As persons under the Fourteenth Amendment, any state statute requiring corporate defendants to appear by counsel denies them equal protection under the law. As this requirement serves no compelling state interest, N.Y. CPL § 600.20 is unconstitutional and unenforceable. Additionally, given the inconsistencies throughout the N.Y. CPL, CPLR, and UDCA, such a distinction between individuals and corporations appears to be arbitrary. NYTAC Corp's application to appear in this proceeding via its president is granted.
1. It is almost universally acknowledged that most state and federal courts approve the rule that corporations must appear by counsel in civil cases. See Holliday's Tax Services Inc., 417 F.Supp. at 183.
2. The Court notes that in Faretta the defendant was an individual, and recognizes the long standing tradition in federal courts that a corporation must appear by counsel. However, it is the belief of this Court that if the right to defend pro se is fundamental, then there is no reason why this right should not be interpreted to apply to all persons, individuals and corporations, brought to trial in the State of New York. It is also noted that the controlling federal precedent in this district recognizes the infirmity of this tradition. See Holliday's Tax Services Inc., 417 F.Supp. 182.
3. Faretta and McIntyre dealt with the right to defend pro se in criminal proceedings. Consistent with these decisions, the Court limits its holding to apply only to criminal cases and does not address the constitutionality of requiring corporations to appear by attorney in civil matters as well.
4. The Court agrees with Judge Weinstein that the bottom line justification is the “convenience of the Court” rationale. This rationale always loses the balancing test against the right to participate in Court. See Holliday's Tax Services Inc., cite supra.
C. STEPHEN HACKELING, J.