WHETHER A PRIVATE COLLEGE ACTED IRRATIONALLY OR ARBITRARILY AND CAPRICIOUSLY IN ELIMINATING FACULTY POSITIONS IN RESPONSE TO A BUDGET SHORTFALL IS PROPERLY DETERMINED IN AN ARTICLE 78 PROCEEDING; HERE THE COLLEGE FOLLOWED THE RELEVANT RULES IN THE COLLEGE MANUAL; SUPREME COURT SHOULD NOT HAVE RULED THE COLLEGE ACTED ARBITRARILY AND CAPRICIOUSLY (THIRD DEPT).

The Third Department, reversing Supreme Court, determined the respondent private college followed the relevant provisions of the college manual in determining what programs and faculty positions to eliminate in response to a budget shortfall. Petitioners, members of the music department faculty whose positions were eliminated, did not demonstrate the respondents’ decisions were irrational or arbitrary and capricious:

A private college, “having accepted a charter and having thus become a quasi-governmental body, can be compelled in a[ CPLR] article 78 proceeding to fulfill not only obligations imposed upon them by State or municipal statutes but also those imposed by their internal rules” …  Thus, a CPLR article 78 proceeding is the appropriate vehicle for judicial review of matters involving a determination of a professor’s benefits and privileges of his or her academic tenure … .

As “the administrative decisions of educational institutions involve the exercise of highly specialized professional judgment and these institutions are, for the most part, better suited to make relatively final decisions concerning wholly internal matters” … . Deference should be accorded to a college’s determination, “and judicial review is circumscribed to whether the [college] failed to substantially comply with its internal rules and whether its decision was arbitrary [and] capricious or made in bad faith … . ….

… [T]he record confirms … there were no procedural rule violations. …

… [T]he record confirms that Supreme Court did not give appropriate deference to respondents’ interpretation of the termination preference — as set forth in chapter 2, § E (1) (1.6) of the manual …  — and that Supreme Court improperly concluded that respondents’ determination was arbitrary and capricious.  Matter of Hansbrough v College of St. Rose, 2022 NY Slip Op 05915, Third Dept 10-20-22

Practice Point: A court’s Article 78 review of a private college’s elimination of faculty positions in response to a budget shortfall is limited to a determination whether the college acted irrationally or arbitrarily and capriciously. Here the record indicated the college followed the relevant rules in the college manual, i.e.,  the college acted rationally.