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Petitioner-Teacher Never Consented to an “Out of Area” Assignment—Therefore She Was Entitled to Seniority in Her Teaching Area, Despite Her Assignment to Another Area

The Third Department determined Supreme Court correctly annulled the commissioner’s determination terminating petitioner’s employment on the ground that her position was properly eliminated because she had the least seniority. Although petitioner was in the English tenure area, she was assigned to teach computer classes, which she had taught for 11 years. The commissioner determined she had acquired no seniority because she had not taught in her tenure area.  However, the relevant regulations require that a teacher consent to an “out of area” assignment. Because petitioner never consented to an “out of area” assignment, she was entitled to seniority in her English tenure area, despite the fact she was assigned to teach computer classes.  The Third Department noted that the Commissioner’s ruling constituted an artificial or forced construction of the applicable regulations:

Petitioner acknowledges that, although the Board awarded her tenure in the English 7-12 tenure area, she never spent 40% or more of her time teaching English classes. She contends, however, that her seniority is preserved by another provision of the Rules, which states that “[n]o professional educator, whether on tenure or in probationary status, may be assigned to devote a substantial portion of his [or her] time in a tenure area other than that in which he [or she] has acquired tenure or is in probationary status, without his [or her] prior written consent” (8 NYCRR 30-1.9 [c]).

Our review of the evidence reveals that petitioner was a professional educator (see 8 NYCRR 30-1.1 [e]) who was assigned exclusively to teach computer classes, which the Board admits was an assignment outside of her probationary and acquired English 7-12 tenure area. The record is devoid of evidence that petitioner was aware that she was given an out-of-area assignment or that she consented to it in writing. * * * Nowhere in the language of 8 NYCRR 30-1.9 (c) is there a requirement that professional educators must first spend some of their time teaching within their probationary or acquired tenure areas before earning the right to consent to an out-of-area assignment. Inasmuch as the Commissioner’s interpretation reads this nonexistent requirement into the provision, we view it as “an artificial or forced construction” (McKinney’s Cons Laws of NY, Book 1, Statutes § 94).

The Commissioner’s interpretation also runs contrary to the underlying purposes of the Rules governing teacher tenure and seniority credit. As the Court of Appeals has noted, 8 NYCRR former 30.9 (b) (now 8 NYCRR 30-1.9 [c]) “protects teachers from being deprived of credit in a previously appointed tenure area if they unwittingly accept, and serve in, out-of-area assignments” … . The “twofold protective purpose” of 8 NYCRR 30-1.9 (c) — that is, to protect teachers from unknowing, involuntary out-of-area assignments and allow for the accrual of seniority credit in their original tenure area if they should accept such an assignment — is not served if the provision is construed in such a way as “to block a teacher from receiving seniority credit which, absent school district error, would have been received by reason of actual service in an out-of-tenure area”… . Because the Commissioner’s interpretation of 8 NYCRR 30-1.9 (c) has precisely this effect on petitioner, we find that Supreme Court properly annulled the Commissioner’s confirmation of petitioner’s termination. Matter of Cronk v King, 2015 NY Slip Op 06396, 3rd Dept 7-30-15

 

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Agency’s Failure to Follow Its Own Regulations Renders Determination Arbitrary and Capricious

The Second Department, over a partial dissent, in a rent-overcharge proceeding, affirmed Supreme Court’s review of the propriety of rent regulated by the NYC Rent Stabilization Code. The court explained the extent of the courts’ review powers of the administrative rulings, noting that the Deputy Commissioner’s failure to calculate the appropriate rent in the manner dictated by the controlling regulations rendered that particular aspect of the Commissioner’s ruling arbitrary and capricious:

“[I]n a CPLR article 78 proceeding to review a determination of the DHCR [NYC Department of Housing and Community Renewal], the court is limited to . . . the question of whether its determination was arbitrary and capricious and without a rational basis” … . In reviewing a determination of the DHCR, “[t]he court may not substitute its judgment for that of the DHCR” … . “The DHCR’s interpretation of the statutes and regulations it administers, if reasonable, must be upheld” … . * * *

In determining that the [landlord was] entitled to a rental increase of $204.01 per month pursuant to Rent Stabilization Code (9 NYCRR) § 2522.4(a)(1), the Deputy Commissioner deviated from the statutory calculations set forth in Rent Stabilization Code (9 NYCRR) § 2522.4(a)(4). Accordingly, the determination to recalculate the legal regulated rent to be $1,200 per month, by including a rental increase of $204.01 per month, was arbitrary and capricious and did not have a rational basis in the record … . Matter of Velasquez v New York State Div. of Hous. & Community Renewal, 2015 NY Slip Op 06353, 2nd Dept 7-29-15

 

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Court’s Review Powers Re: a Planning Board’s Denial of a Subdivision Application Explained

In upholding the Planning Board’s denial of petitioner’s subdivision application, the Second Department explained the court’s review criteria in this context: “The court will substitute its judgment for that of a planning board only when the determination was affected by an error of law, or was arbitrary and capricious or an abuse of discretion, or was irrational (… see CPLR 7803[3]…). When reviewing a planning board’s determination, courts consider substantial evidence only to determine whether the record contains sufficient evidence to support the rationality of the Board’s determination…”. [internal quotation marks omitted] The Second Department went on to look at the evidence, which, although conflicting in some aspects, included support for the rationality of the Planning Board’s ruling. Matter of Ostojic v Gee, 2015 NY Slip Op 06244, 2nd Dept 7-22-15

 

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Conversion of Water to Steam and Steam to Water Did Not Constitute a Manufacturing Process—Therefore Petitioner Was Not Entitled to Manufacturing Tax Credits in Connection with the Operation of Its “Boiling Water” Nuclear Power Facilities—The Certification Prerequisite for Pollution Tax Credits Is Not Preempted by Federal Law which Regulates the Construction and Operation of Nuclear Power Facilities

The Third Department, in a full-fledged opinion by Justice Garry, determined that petitioner, the owner of two nuclear power plants, was not entitled to manufacturing tax credits or pollution tax credits under the Tax Law. The production of electricity is specifically excluded from the range of “manufacturing” for which manufacturing credits are available. The petitioner argued that the water which is turned into steam and then back into water (to operate the turbines) constituted a manufacturing process within the meaning of the Tax Law. The Third Department disagreed, describing the process as recycling, not manufacturing. The pollution tax credits are available only to facilities certified by the Department of Environmental Conservation as compliant with state environmental, public health and sanitary rules. Petitioner’s facilities were not so certified. The Third Department determined that the state certification requirement was not preempted by federal law, which exclusively regulates the construction and operation of nuclear power facilities, because tax credits do not regulate the construction or operation of such facilities. Petitioner was not, therefore, entitled to pollution tax credits. With regard to the manufacturing tax credits, the court explained:

Manufacturing is defined as “the process of working raw materials into wares suitable for use or which gives new shapes, new quality or new combinations to matter which already has gone through some artificial process by the use of machinery . . . and other similar equipment” (Tax Law former § 210 [12] [b] [ii] [A]), and “‘processing’ speaks to an industrial activity related to manufacturing” … . Here, the water that is converted to steam by petitioner’s assets is then converted back to its original form as water and then to steam again in an ongoing, continuous cycle that makes no permanent change in the water and yields no final product. This is more akin to recycling than to manufacturing. On these facts, we cannot find it irrational for the Tribunal to conclude that the claimed assets were not principally engaged in producing any tangible property other than electricity … . Petitioner has neither established that its interpretation of the governing statute is the only reasonable construction nor that the Tribunal’s interpretation was “irrational or unreasonable”…  and, thus, has not shown that the Tribunal’s determination that it is ineligible for the manufacturing tax credits should be reversed.  Matter of Constellation Nuclear Power Plants LLC v Tax Appeals Trib. of the State of N.Y., 2015 NY Slip Op 06183, 3rd Dept 7-16-15

 

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Failure to Strictly Comply with the Procedure Mandated by the State Environmental Quality Review Act (SEQRA) Required Annulment of the Town’s Negative Declaration Re: the Construction of a Casino and Resort

The Fourth Department, with two concurring and one dissenting justice, determined that the town’s negative declaration under the State Environmental Quality Review Act (SEQRA) with respect to the construction of a casino and resort should have been annulled because the town did not strictly comply with mandated procedure. Specifically the negative declaration did not include a “reasoned elaboration” as required by the relevant regulation. A document prepared by the town’s counsel explaining the reasons for the negative declaration was never approved or adopted by the town board and therefore did not meet the statutory/regulatory “reasoned elaboration” requirement:

It is well settled that SEQRA’s procedural mechanisms mandate strict compliance, and anything less will result in annulment of the lead agency’s determination of significance … . “[L]iteral rather than substantial compliance with SEQRA is required” … . Here, 6 NYCRR 617.7 (b) (4) requires that, in making the determination of significance, the lead agency—in this case the Town Board—must “set forth its determination of significance in a written form containing a reasoned elaboration and providing reference to any supporting documentation.” We conclude that the intent of the regulation is to focus and facilitate judicial review and, of no lesser importance, to provide affected landowners and residents with a clear, written explanation of the lead agency’s reasoning at the time the negative declaration is made. We reject respondents’ contention that we should search the entire record to discern the Town Board’s reasoning as of June 12, 2014 in making the determination to issue the negative declaration. “A record evincing an extensive legislative process . . . is neither a substitute for strict compliance with SEQRA’s [written] reasoned elaboration requirement nor sufficient to prevent annulment” … . We therefore reverse the judgment and grant the petition, thereby annulling the negative declaration and vacating the site plan approval and all related resolutions. Matter of Dawley v Whitetail 414, LLC, 2015 NY Slip Op 06082 4th Dept 7-10-15

 

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Area in the Vicinity of the Indian Point Nuclear Power Facility Properly Classified as a Statutorily Protected Environmental Habitat

The Third Department affirmed the Secretary of State’s expansion of a statutory “significant coastal fish and wildlife habitat area” along the Hudson River in the vicinity of the Indian Point nuclear power facility.  The petitioner, the owner of Indian Point, sought to have the designation of the area as a statutorily protected environmental habitat annulled. The Third Department (1) explained a court’s powers when reviewing an agency’s interpretation of its own regulations; (2) determined the agency did not engage in formal rulemaking (which would be subject to the stringent procedural requirements of the State Administrative Procedure Act); and (3) determined certain documents were properly withheld re: petitioner’s Freedom of Information Law (FOIL) requests:

When an agency interprets a regulation that it promulgated, deference is afforded to that agency’s interpretive approach unless it is “irrational or unreasonable” … . To this end, the promulgating agency’s interpretation may not be adjudged irrational simply because other rational constructions of the regulatory provision in question exist …, nor because the promulgating agency’s reading of the relevant regulatory language either broadens its plain-language scope … or amounts to a “strict[ly] literal interpretation” … . Furthermore, “the determination of an agency acting pursuant to its authority and within its area of expertise is[, similarly,] entitled to judicial deference” … . In contrast, an agency’s interpretation of one of its own regulations is not entitled to deference if that interpretation contradicts the plain language of the regulation (see Matter of Elcor Health Servs. v Novello, 100 NY2d at 280), and an agency may be deemed to have acted irrationally if an interpretation of a regulation marks an unsubstantiated departure from the agency’s previous position on a given subject … . * * *

State Administrative Procedure Act § 102 (2) (a) (i), in pertinent part, defines a “[r]ule” as “the whole or part of each agency statement, regulation or code of general applicability that implements or applies law.” In contrast, State Administrative Procedure Act § 102 (2) (b) (iv) excludes from this statutory definition “forms and instructions, interpretive statements and statements of general policy which in themselves have no legal effect but are merely explanatory.” While “there is no clear bright line between a ‘rule’ or ‘regulation’ and an interpretative policy,” an agency does not engage in formal rulemaking when the practical effect of an agency’s updated policy is that a discrete group of regulated entities or individuals likely will be subjected to a greater degree of regulatory scrutiny than are the majority of those regulated by the agency … . When an agency engages in a course of regulatory action that amounts to formal rulemaking but does not comply with the procedural requirements of State Administrative Procedure Act article 2, that regulatory action must be annulled … .

We agree with respondents that the habitat boundaries’ modification that gave rise to Hudson Highlands did not amount to formal rulemaking.  * * *

In response to petitioners’ discovery and Freedom of Information Law requests, respondents withheld a small number of documents pursuant to Public Officers’ Law § 87 (2) (g), which allows for “people within an agency to exchange opinions, advice and criticism freely and frankly, without the chilling prospect of public disclosure” … . Supreme Court correctly concluded that “respondents’ interest in maintaining the confidentiality of the records and in allowing the candid exchange of ‘opinions, advice and criticism'” was valid and outweighed petitioners’ interest in having them. Petitioners argue that respondents waived the deliberative process privilege by describing the agencies’ decision-making process within the scientists’ affidavits. We find petitioners’ claims that respondents have waived the deliberative process privilege to be unpersuasive … . Matter of Entergy Nuclear Indian Point 2, LLC v New York State Dept. of State, 2015 NY Slip Op 05988, 3rd Dept 7-9-15

 

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Substantial Evidence Did Not Support Maltreatment Report

The Third Department determined the Commissioner of Children and Family Services should have granted the petition to expunge and amend as unfounded a maltreatment report maintained by the Central Register of Child Abuse and Maltreatment. Although the denial could properly be based upon hearsay and double hearsay, the maltreatment finding was not based upon substantial evidence:

To establish maltreatment, the agency was required to show by a fair preponderance of the evidence that the physical, mental or emotional condition of the child had been impaired or was in imminent danger of becoming impaired because of a failure by petitioner to exercise a minimum degree of care in providing the child with appropriate supervision or guardianship … . Our review is limited to assessing whether the determination is supported by substantial evidence, meaning “such relevant proof as a reasonable mind may accept as adequate to support a conclusion or ultimate fact”… .

Here, the proof introduced against petitioner consisted solely of the investigation progress notes and a Family Court order from 1998 that adjudicated petitioner to have neglected another son. The progress notes were prepared by a child protective services caseworker and include her accounts of interviews with numerous individuals, including the child and his therapist, that led her to the conclusion that maltreatment had occurred. Neither the caseworker nor her interview subjects testified before the Administrative Law Judge, however, and the progress notes reflect that the child bore no marks or evident injuries as a result of the maltreatment. In contrast to this meager evidentiary showing, petitioner and his wife both testified and denied that any maltreatment had occurred. Petitioner also asserted, without contradiction, that he was physically incapable of engaging in some of the claimed maltreatment, such as lifting the 110-pound child with one hand. His wife further stated that the child admitted to her that he was lying about the alleged maltreatment. The record suggests a reason why the child might be prompted to lie, as a bitter custody dispute between petitioner and the child’s mother has led to numerous unfounded reports of mistreatment regarding petitioner.

Like any administrative determination, one made after an expungement hearing may be based solely upon hearsay evidence — or even double hearsay evidence — in the appropriate case … . As such, “our concern is not the hearsay nature of the evidence, but whether it is sufficiently relevant and probative to constitute substantial evidence” … . Hearsay evidence will not satisfy that standard if the facts it purportedly establishes are “seriously controverted” … . Serious controversy is precisely what surrounds the hearsay evidence here, given the hearing testimony that the maltreatment had not occurred and that the child had recanted his claims, the proof that motivations may have existed for the child to fabricate the maltreatment, and the total lack of physical evidence suggesting that it occurred. We accordingly agree with petitioner that substantial evidence does not support the challenged determination, which must be annulled as a result … . Matter of Gerald HH. v Carrion, 2015 NY Slip Op 05982, 3rd Dept 7-9-15

 

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Parents of Children in Public Schools Had Standing to Seek Court Review of the SUNY Trustees’ Authorization of Charter Schools—The Authorization Was Not Arbitrary or Capricious or an Abuse of Discretion

The Second Department determined parents of children in public schools had standing to bring an Article 78 petition for a review of the SUNY Trustee’s authorization for charter schools. The court determined the authorization was not arbitrary or capricious or an abuse of discretion, noting that there was no requirement of majority community support:

The petitioners, a group of parents of children in public schools in Community School District 14 and an organization they founded to oppose the subject charter schools, commenced this proceeding pursuant to CPLR article 78 to review the SUNY Trustees’ determination authorizing the charters. The amended petition alleged that the SUNY Trustees authorized the charters in violation of Education Law §§ 2851(2)(q), 2852(9-a)(b)(ii), and 2852(2)(a), in that [the charter school organization] failed to demonstrate adequate community support, outreach, or input, and therefore, the charters should be voided. * * *

In authorizing the issuance of charters to the subject schools, the SUNY Trustees were required to find that the proposed schools met all requirements of the Charter School Act (see Education Law § 2852[2][a]). Given the representations and support therefor contained in [the] applications, the SUNY Trustees’ determination that [the charter school organization] met the statutory requirements with regard to evidence “of adequate community support for and interest in the charter school sufficient to allow the school to reach its anticipated enrollment” (Education Law § 2851[2][q]), and public outreach to solicit community input and address comments received from the impacted community concerning the educational and programmatic needs of students (see Education Law § 2852[9-a][b][ii]…), was, insofar as relevant here, not arbitrary and capricious. As the SUNY Trustees and the charter schools correctly contend, majority community support is not required by the Charter Schools Act (see Education Law § 2851[2][q]). Matter of Williamsburg & Greenpoint Parents: Our Pub. Schools! v Board of Trustees, State Univ. of N.Y., 2015 NY Slip Op 05690, 2nd Dept 7-1-15

 

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NYC Taxi and Limousine Commission (TLC) Had the Authority to Enter a 10-Year Exclusive Agreement with Nissan for the Production of the “Taxi of Tomorrow (T o T),” NYC’s Official Taxicab

The Court of Appeals determined the NYC Taxi and Limousine Commission (TLC) did not exceed the authority granted the commission by the City Council when it entered a 10-year exclusive agreement with Nissan to provide the “Taxi of Tomorrow (T o T),” New York City’s official taxicab:

A legislature may enact a general statutory provision and delegate power to an agency to fill in the details, as long as reasonable safeguards and guidelines are provided to the agency (see Boreali v Axelrod, 71 NY2d 1, 10 [1987]). As a creation of a legislative body, the TLC possesses the powers expressly conferred by the City Council, as well as those “required by necessary implication” … . “[A]n agency can adopt regulations that go beyond the text of [its enabling] legislation, provided they are not inconsistent with the statutory language or its underlying purposes” … . The question before us is whether the authority granted to the TLC by the City Council included the power to enact the ToT rules, or whether the agency has exceeded its authority and acted in a manner not contemplated by the legislative body … .  * * *

The City Council granted the TLC extremely broad authority to enact rules, including the ToT rules. The TLC was created with the stated purposes of “continuance, further development and improvement of taxi and limousine service in the city of New York” (NY City Charter § 2300). The City Charter provides that the TLC is authorized, “consonant with the promotion and protection of the public comfort and convenience[,] to adopt and establish an overall public transportation policy governing taxi . . . services as it relates to the overall public transportation network of the city; to establish . . . standards for equipment safety and design; . . . and to set standards and criteria for the licensing of vehicles” used in taxi service (NY City Charter § 2300 [emphasis added]). * * *

In granting the TLC this broad authority, the City Charter includes guidelines for the TLC to consider, such as “safety, and design, comfort, convenience, noise and air pollution control and efficiency in the operation of vehicles” (NY City Charter § 2303 [b] [6]). Although the TLC has generally applied the “specs method” when promulgating rules about the design of taxis, it points to a major shortcoming of that method — the situation where no available model meets the specs in the rules as, for example, when Ford discontinued the Crown Victoria … . The TLC determined that “[t]he most obvious alternative to vehicle specifications [is the] competitive selection of taxicab vehicle models,” as embodied in the ToT project … . This new method was intended to be a more efficient way to reach the same result and, in our view, falls within the broad authority granted to the TLC. Greater N.Y. Taxi Assn. v New York City Taxi & Limousine Commn., 2015 NY Slip Op 05514, CtApp 6-25-15

 

Liquor Authority Properly Complied with the Requirements for Issuing a Liquor License When Three or More Licensed Premises Are Located Within 500 Feet

The First Department, in a full-fledged opinion by Justice Acosta, determined a petition to annul the NYS Liquor Authority’s conditional approval of a liquor license was properly denied.  The Liquor Authority properly considered the factors associated with the “500-foot-rule” requiring good cause for the issuance of a license when there are three or more licensed premises within 500 feet:

Ordinarily, applications for licenses to sell liquor for consumption on premises “shall be issued to all applicants except for good cause shown” (ABCL § 64[1]); however, no such license shall be granted for any premises within 500 feet of three or more existing licensed and operating premises, unless the Authority “determines that granting such license would be in the public interest” (ABCL § 64[7][b], [f]). In determining whether the granting of a license will promote the public interest, the Authority may consider:

“(a) The number, classes and character of licenses in proximity to the location and in the particular municipality or subdivision thereof.

“(b) Evidence that all necessary licenses and permits have been obtained from the state and all other governing bodies.

“(c) Effect of the grant of the license on vehicular traffic and parking in proximity to the location.

“(d) The existing noise level at the location and any increase in noise level that would be generated by the proposed premises.

“(e) The history of liquor violations and reported criminal activity at the proposed premises.

“(f) Any other factors specified by law or regulation that are relevant to determine the public convenience and advantage and public interest of the community” (ABCL § 64[6-a]).

These factors are intended to guide the Authority “in assuring that appropriate factors are taken into consideration which relate to the business and the impact it has . . . [and] to assure that quality of life impacts are fully incorporated into the responsible state decision-making apparatus” … .

In cases implicating this 500-foot rule, “[b]efore it may issue any such license, the [A]uthority shall conduct a hearing, upon notice to the applicant and the municipality or community board, and shall state and file in its office its reasons therefor” (ABCL § 64[7][f]).

“A reviewing court is not entitled to interfere in the exercise of discretion by an administrative agency unless there is no rational basis for the exercise, or the action complained of is arbitrary and capricious” … . Courts look to whether the determination “is without sound basis in reason and is generally without regard to the facts” … .

Regarding the substance of the reasons stated by the Authority, this Court has held that something more than a “perfunctory recitation” is needed to comply with the requirement that the Authority state its reasons for concluding that issuance of a license would be in the public interest … .

Here, the Authority’s written statement sets forth detailed, concrete reasons for its determination, made after a hearing, that issuance of a liquor license … would be in the public interest (ABCL § 64[7][b], [f]). Matter of BarFreeBedford v New York State Liq. Auth., 2015 NY Slip Op 05428, 1st Dept 6-23-15

 

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