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A state judge refused Thursday to block the $126 million deal to make Snapple the exclusive beverage vendor in New York City municipal buildings. But other aspects of the agreement could face further review under the City Charter, according to those who challenged it. Supreme Court Justice Richard F. Braun ruled that City Comptroller William A. Thompson’s challenge to the contract, which he described as “innovative,” was improper and insufficient to put the deal on hold. But the judge ruled in Thompson’s favor on a key aspect of his challenge to the way the Bloomberg administration struck its agreement with the beverage company. Although the city submitted its vending-machine concession agreement to the Franchise and Concession Review Committee (FCRC) for approval, it did not submit the portion of the contract dealing with intellectual property — in this case, the city’s name. Under the agreement, Snapple will have the right to market the city and its brand through its own initiatives. The holding turned on the meaning of the word “property” in the City Charter �362 (a). It defines a concession as “a grant … for the private use of city-owned property.” The city argued that “property” does not include intellectual property. Justice Braun rejected the city’s position and said the word “should be interpreted under its expansive common meaning to include intellectual property.” Writing in Application of the Comptroller of the City of New York, 106253/04, the judge wrote: “One practical effect is that the FCRC, when reviewing future contracts as to concessions, will have to do a broader review, and the members of the FCRC, including [the comptroller], will have more input into the review and approval process for concessions, which is to the public benefit.” Judd Burstein, who represented the comptroller, said he was ecstatic about the ruling and called it a “complete victory.” “It completely eviscerates the mayor’s position that he can deal with the city’s intellectual property with absolutely no transparent process,” Burstein said. “As we read this decision, any new contract entered into with Snapple with have to be further submitted to the FCRC.” Assistant Corporation Counsel Jonathan S. Becker, who represented the city, said that the city interpreted the ruling to defeat all challenges to the Snapple contract. In a statement, Corporation Counsel Michael A. Cardozo cast the ruling as a victory for the mayor, since the vending contract would remain in place. He said the city would appeal the intellectual property aspect of Braun’s ruling. “We disagree with the Court’s opinion that intellectual property such as efforts to market the City’s image constitute a ‘concession,’ like a restaurant in a park,” Cardozo said in a statement. “We anticipate a successful appeal of that portion of the Court’s decision.” Thompson sued over the deal in April, saying it was the result of a possibly “corrupt” process and seeking a restraining order that would have stopped the installation of Snapple vending machines in city buildings, including courthouses. Braun denied the restraining order and Thursday said the comptroller could not, under the City Charter, refuse to register a contract on grounds that the process was corrupt. The judge said the comptroller could have successfully challenged the contract on grounds that the Corporation Counsel’s Office and the mayor did not properly certify it before filing it. But the comptroller did not challenge that mistake in his original petition, the judge wrote, hence waiving those objections. “The municipal respondents have initiated an innovative project with respondent Snapple, which apparently will be of great benefit to the City … and its residents and taxpayers,” Braun wrote. “Nevertheless, the municipal respondents still must follow proper procedures under the New York City Charter, which provides for checks and balances among different parts of the executive branch of City government in order to protect the public interest.” Assistant Corporation Counsel Warren Shaw also represented the city. Snapple was represented by Jeremy Epstein, Richard Schwed and Andrew C. Agor of Shearman & Sterling.

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