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THE DEPARTMENT OF FINANCIAL SERVICES’ AMENDMENT TO AN INSURANCE REGULATION DESIGNED TO PROTECT CONSUMERS OF LIFE INSURANCE AND ANNUITY PRODUCTS IS VOID FOR VAGUENESS (THIRD DEPT).

The Third Department, in a full-fledged opinion by Justice Egan, reversing Supreme Court, determined the Department of Financial Services’ (DFS’s) amendment to an Insurance Regulation was void for vagueness:

The amendment was promulgated to address concerns with respect to the growing complexities involved with life insurance and annuity products, the corresponding need for consumers to increasingly rely on the advice of professionals in order to comprehend the widening market of products available and to mitigate abuses with respect to the compensation of agents and brokers (hereinafter collectively referred to as producers [see 11 NYCRR 224.3 (c)]) who have incentive to manipulate consumers into purchasing financial products that result in higher commissions but ultimately fail to meet their needs. * * *

… [W]hile the consumer protection goals underlying promulgation of the amendment are laudable, as written, the amendment fails to provide sufficient concrete, practical guidance for producers to know whether their conduct, on a day-to-day basis, comports with the amendment’s corresponding requirements for making recommendations and compiling and evaluating the relevant suitability information of the consumer … . Although the amendment provides certain examples of what a recommendation does not include (i.e., “general factual information to consumers, such as advertisements, marketing materials, general education information” and “use of . . . interactive tool[s]” (11 NYCRR 224.3 [e] [2]), the remaining definitional language is so broad that it is difficult to discern what statements producers could potentially make that would not be reasonably interpreted by the consumer to constitute advice regarding a potential sales transaction and therefore fall within the purview of the amendment (see 11 NYCRR 224.3 [e] [1], [2]). Matter of Independent Ins. Agents & Brokers of N.Y., Inc. v New York State Dept. of Fin. Servs., 2021 NY Slip Op 02574, Third Dept 4-29-21

 

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NYU DID NOT ACT ARBITRARILY AND CAPRICIOUSLY WHEN IT SUSPENDED THREE STUDENTS FOR ATTENDING OFF-CAMPUS ROOFTOP PARTIES IN AUGUST 2020 WHERE THE ATTENDEES DID NOT WEAR MASKS AND DID NOT PRACTICE SOCIAL DISTANCING (FIRST DEPT).

The First Department, reversing Supreme Court, determined the school (New York University NYU) properly suspended three students for attending off-campus, rooftop parties in August 2020 where the attendees did not wear masks or practice social distancing. The First Department found that the general student conduct policies prohibiting behavior which endangers health and safety, the COVID-19 Executive Orders in effect at the time, and emails sent out by the school provided sufficient pre-conduct notice of the prohibited conduct:

… [W]e find that NYU’s determination to suspend petitioners was not arbitrary and capricious and was made in the exercise of honest discretion. Petitioners had notice that the gatherings they attended in August 2020 could result in disciplinary action by NYU. Matter of Storino v New York Univ., 2021 NY Slip Op 02087, First Dept 4-1-21

 

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THE FINDING THAT THE COMPLAINANT CONSENTED TO LYING DOWN IN BED WITH PETITIONER FOR THE NIGHT BUT DID NOT CONSENT TO HAVING SEX WAS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE; THE COLLEGE’S DETERMINATION THAT PETITIONER VIOLATED THE STUDENT CODE OF CONDUCT ANNULLED (SECOND DEPT).

The Second Department, annulling the determination of the Campus Appeals Board of SUNY Purchase College, held the Board’s conclusion petitioner had sexual intercourse with the complainant without the complainant’s consent was not supported by substantial evidence. The Board had found the evidence that complainant was unable to give consent “conflicting and unreliable:”

After the hearing, the Hearing Board found “the complainant’s statements to be conflicting and unreliable as it pertained to her inability to give consent.” The Hearing Board concluded that “[t]here were considerable gaps in the complainant’s memory,” and indicated that it was “concerned that some of her statements after her initial report were tainted by reading the reports that were submitted by other witnesses and parties.” Nevertheless, the Hearing Board found that although there was consent for lying together in bed, kissing, and the removal of the complainant’s pants, the complainant had not consented to the remainder of the sexual activity. …

… [T]he determination that the petitioner violated code C.8 was not supported by substantial evidence. Having rejected the complainant’s testimony that she was incapable of giving consent, the Hearing Board was not left with adequate evidence to support the conclusion that while the complainant consented to spending the night in the petitioner’s bed, kissing, and removing her pants, she did not consent to the remainder of the sexual activity. The Board indicated that its finding of nonconsensual conduct was based on the statements of the petitioner and the complainant “that clear, affirmative consent for these activities was not given.” However, the petitioner, while freely admitting that he did not obtain verbal consent, clearly asserted that the complainant consented with her actions … . Matter of Doe v Purchase Coll. State Univ. of N.Y., 2021 NY Slip Op 01974, Second Dept 3-31-21

 

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ALTHOUGH THE ARTICLE 78 PROCEEDING WAS PROPERLY TRANSFERRED TO THE APPELLATE DIVISION, THE RELATED DECLARATORY JUDGMENT ACTION WAS NOT TRANSFERABLE (FOURTH DEPT).

The Fourth Department determined Supreme Court properly transferred the Article 78 proceeding to the appellate division because there was a quasi-judicial hearing before an administrative law judge at which evidence was taken. The court noted that the aspect of the underlying action which sought a declaratory judgment could not be transferred to the appellate division:

… [A]lthough petitioner also contends that she is entitled to declaratory relief, we do not “have jurisdiction to consider the declaratory judgment action as part of this otherwise properly transferred CPLR article 78 proceeding” … . The transfer of a declaratory judgment action to this Court is not authorized by CPLR 7804 (g) … and we “lack[] jurisdiction to consider a declaratory judgment action in the absence of a proper appeal from a court order or judgment” … . We therefore vacate the order insofar as it transferred the declaratory judgment action, sever the declaratory judgment action and CPLR article 78 proceeding, and remit the declaratory judgment action to Supreme Court for further proceedings … . Matter of Blue v Zucker, 2021 NY Slip Op 01924, Fourth Dept 3-26-21

 

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FUNDS FOR PERSONAL CARE SERVICES ARE MEDICAID FUNDS SUBJECT TO THE AUDIT AND RECOUPMENT AUTHORITY OF THE CITY OF NEW YORK HUMAN RESOURCES ADMINISTRATION; APPELLATE DIVISION REVERSED (CT APP)..

The Court of Appeals, reversing the Appellate Division, determined funds paid for personal care were Medicaid funds which were subject to the audit and recoupment authority of the City of New York Human Resources Administration (HRA). The facts are explained in the Appellate Division decision:

For the reasons stated in the dissenting opinion below (Matter of People Care Inc. v City of New York, 175 AD3d 134, 147-152 [1st Dept 2020] [Richter, J.P., dissenting]), we conclude that the funds for personal care services paid to petitioner People Care, Inc. under the Health Care Reform Act (Public Health Law §§ 2807-v [1] [bb] [i], [iii]) are Medicaid funds subject to the audit and recoupment authority of the City of New York Human Resources Administration (HRA) in accordance with the parties’ 2001 contract. Matter of People Care Inc. v City of N.Y. Human Resources Admin., 2021 NY Slip Op 01834, CtApp 3-25-21

 

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THE NYPD OFFICER WHO EMPLOYED A PROHIBITED CHOKEHOLD ON ERIC GARNER, WHICH CONTRIBUTED TO ERIC’S DEATH, WAS PROPERLY DISMISSED FROM THE NYPD (FIRST DEPT).

The First Department determined the police officer who employed a prohibited chokehold on Eric Garner, which contributed to Eric’s death, was properly dismissed from employment by the New York Police Department (NYPD):

Substantial evidence supports respondents’ conclusion that petitioner recklessly caused injury to Eric Garner by maintaining a prohibited chokehold for 9 to 10 seconds after exigent circumstances were no longer present, thereby disregarding the risk of injury (Penal Law §§ 15.05[3]; 120.00[2] …).

We do not find the penalty “so disproportionate to the offense, in light of all the circumstances, as to be shocking to one’s sense of fairness” … . Conduct far less serious than petitioner’s has been found by the Court of Appeals to have a “destructive impact . . . on the confidence which it is so important for the public to have in its police officers” … . Matter of Pantaleo v O’Neill, 2021 NY Slip Op 01857, First Dept 3-25-21

 

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PETITIONER SOUGHT ATTORNEY’S FEES AS THE PREVAILING PARTY PURSUANT TO NEW YORK’S EQUAL ACCESS TO JUSTICE ACT UNDER THE “CATALYST THEORY;” THE 4TH DEPARTMENT REJECTED THE CATALYST THEORY, FINDING PETITIONER WAS NOT THE PREVAILING PARTY UNDER THE TERMS OF THE STATUTE (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined that the so-called “catalyst theory” did not apply to New York’s Equal Access to Justice Act (EAJA). The EAJA, in certain circumstances, allows a prevailing party to recover attorney’s fees against the state. Here petitioner argued that petitioner’s seeking reconsideration of a determination by the NYS Office for People with Developmental Disabilities (OPWDD) prompted the OPWDD to grant petitioner’s application. Petitioner argued the request for reconsideration was the “catalyst” for the OPWDD’s granting the application and petitioner was therefore entitled to attorney’s fees. The Fourth Department determined petitioner was not a “prevailing party” within the meaning of the NYS EAJA:

This Court has yet to address the issue, but we now reject application of the catalyst theory in State EAJA cases. Where, as here, litigation is rendered moot by an administrative change in position, the petitioner or plaintiff has not prevailed “in the civil action” (CPLR 8602 [f]). Matter of Criss v New York State Dept. of Health, 2021 NY Slip Op 01642, Fourth Dept 3-19-21

 

THE LEGISLATURE PROPERLY EMPOWERED THE COMMITTEE ON LEGISLATIVE AND EXECUTIVE COMPENSATION TO RECOMMEND LEGISLATIVE AND EXECUTIVE BRANCH SALARY INCREASES AND THE COMMITTEE DID NOT EXCEED THE SCOPE OF ITS AUTHORITY (THIRD DEPT).

The Third Department, in a full-fledged opinion by Justice Lynch, determined the Committee on Legislative and Executive Compensation was properly created by the Legislature in the 2018 budget bill and the recommendations of salary increases did not exceed the scope Committee’s authority:

Plaintiffs commenced this declaratory judgment action seeking, among other things, declarations that (1) the enabling statute was an unlawful delegation of legislative authority under the NY Constitution, (2) the Committee exceeded the scope of any authority lawfully delegated to it, (3) the disbursement of funds according to the Committee’s report was unlawful under State Finance Law § 123, and (4) the Committee’s report was void under the Open Meetings Law (see Public Officers Law art 7). Defendants filed a pre-answer motion to dismiss the complaint pursuant to CPLR 3211 (a) (7). * * *

“While the Legislature cannot delegate its lawmaking functions to other bodies, there is no constitutional prohibition against the delegation of power to an agency or commission to administer the laws promulgated by the Legislature, provided that power is circumscribed by reasonable safeguards and standards” … . Although the NY Constitution vests in the Legislature the authority to “‘determine its own compensation'” … , plaintiffs have proffered no persuasive authority supporting the proposition that the Legislature may not delegate such authority to an independent body in the manner done here, so long as the Legislature makes the basic policy choice and provides reasonable standards and safeguards circumscribing the body’s authority. Delgado v State of New York, 2021 NY Slip Op 01534, Third Dept 3-18-21

 

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TWO ZONING VIOLATION SUMMONSES ADDRESSING THE SAME USE OF THE PROPERTY WERE NOT DUPLICATIVE; THEREFORE THE NYC DEPARTMENT OF BUILDINGS’ FAILURE TO APPEAL THE DISMISSAL OF THE FIRST SUMMONS DID NOT PRECLUDE THE SECOND (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Oing, determined that two actions brought by the NYC Department of Buildings (DOB) seeking the removal of four large industrial shipping containers from petitioner’s auto-repair-shop premises were not duplicative. Therefore the DOB’s failure to appeal the dismissal of the first summons did not preclude the second summons. The second summons was dismissed by the hearing officer but was reinstated by the OATH [NYC Office of Trials and Hearings] Appeals Unit. The First Department upheld the reversal by the Appeals Unit. [The decision covers several substantive issues not summarized here]:

Petitioners argue primarily that although the summonses cite to two different provisions of the law — a Zoning Resolution violation and a certificate of occupancy violation pursuant to Administrative Code § 28-118.3.2 — the same proof and arguments were presented at the hearings for both summonses, namely, the certificate of occupancy, photographs depicting storage of the shipping containers on the property, the argument that the shipping containers would be transformed into trucks, and the counterargument that the storage was not a permitted use. They contend that this analysis is sufficient to demonstrate the duplicative nature of the summonses. The argument is unavailing. * * *

Here … the same body of evidence is used to prove two different violations, a violation of the Zoning Resolution, which covers the permitted uses and businesses within a specific area, and a violation of the certificate of occupancy, which applies specifically to the property, and describes the legal occupancy and use of that property. Moreover, the remedy for the two summonses is not the same. The first summons demanded that petitioners discontinue the illegal use, while the second summons provided for alternative remedies — discontinue illegal use or amend the certificate of occupancy. Accordingly, the OATH Appeals Unit’s finding that the second summons was not duplicative of the first summons was not arbitrary and capricious. Matter of Karakash v Del Valle, 2021 NY Slip Op 01484, First Dept 3-11-21

 

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BUDGETARY CONCERNS RELATED TO THE COVID-19 PANDEMIC JUSTIFED THE DENIAL OF CERTIFICATION TO CONTINUE SERVING ON THE BENCH TO 46 SUPREME COURT JUSTICES WHO REACHED THE MANDATORY RETIREMENT AGE OF 70 IN 2020 (THIRD DEPT).

The Third Department, reversing Supreme Court, in a full-fledged opinion by Justice Lynch, over a partial dissent, determined the Administrative Board of the NYS Unified Court System did not act arbitrarily and capriciously when it denied certification to 46 of 49 Supreme Court Justices who reached the age of 70 in 2020. Retirement at age 70 is mandated by the NYS Constitution. But certification to continue serving on the bench can be granted by the Board. Here the Board based its decision to deny certification to 46 justices on budgetary concerns resulting from the COVID-19 pandemic:

The Board minutes explain that the Board “declined to certify 46 of the 49 [Justices] applying for certification owing to current severe budgetary constraints occasioned by the coronavirus pandemic. Three [Justices], having specialized additional assignments[,] were certified.” The Board’s certification of three applicants reflects both an individualized assessment and a recognition — “at least impliedly” — that additional judicial services are necessary … . …”[W]hether the services of a particular Justice are ‘necessary to expedite the business of the court’ encompasses much more than a mechanical inquiry into the size of the courts’ docket divided by the number of Justices” … . Certainly, it should be recognized that the continued services of the petitioner Justices would advance the needs of the court in managing an expanding caseload. That positive contribution, however, is not the deciding factor, as the Board is charged with balancing the costs of certification with the overall needs of the court system … . … [T]he Board made the extremely difficult judgment call that certification would prove too costly under the economic dilemma presented. … [C]ertification would significantly disrupt overall court operations given that the alternative savings mechanism would require more than 300 layoffs of nonjudicial personnel. Achieving the proper balance for the court system was for the Board to determine. … In our view, the Board acted in accord with the governing standard and within the scope of its broad authority in basing its ultimate decision on the overall needs of the court system. Matter of Gesmer v Administrative Bd. of the N.Y. State Unified Ct. Sys., 2021 NY Slip Op 01376, Third Dept 3-9-21

 

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