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Hearsay Insufficient to Support Revocation of Substance Abuse Counselor Credential

The Third Department determined the hearsay evidence used to justify the revocation of petitioner’s credential as a Credentialed Alcoholism and Substance Abuse Counselor (CASAC) was insufficient:

Substantial evidence has long been defined as “such relevant proof as a reasonable mind may accept as adequate to support a conclusion or ultimate fact”… .  In this regard, an administrative determination may be based entirely upon hearsay evidence …– provided such evidence is “sufficiently relevant and probative” … or “sufficiently reliable” … and is not otherwise “seriously controverted” … . * * *

Although we have no doubt that the investigator conducted thorough interviews with many of those involved and accurately related – in both his report and his corresponding testimony – the specific information gleaned therefrom, we cannot say – given the particular facts of this case – that the hearsay proof adduced at the hearing was “the kind of evidence on which responsible persons are accustomed to rely in serious affairs”… .  Matter of Doctor v NYS Office of Alcoholism and Substance Abuse Services…, 516209, 3rd Dept 12-5-13

 

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Department of Homeless Services’ New Eligibility Procedure Triggered the Notice and Hearing Requirements of the City Administrative Procedure Act

The Court of Appeals, in a full-fledged opinion by Judge Graffeo, determined that the NYC Department of Homeless Services’ (DHS’s) adoption of a new Eligibility Procedure for temporary housing assistance triggered the notice and hearing requirements of the City Administrative Procedure Act (CAPA).  The failure to comply with the act prohibited implementation of the new rules.  In explaining that the Eligibility Procedure met the definition of a rule or regulation, the Court wrote:

DHS argues that the Eligibility Procedure is not a rule because DHS workers exercise some measure of discretion in resolving certain issues relevant to eligibility, such as whether an applicant has provided adequate cooperation during the need assessment process.  But the procedure itself is mandatory — all intake workers must follow it, regardless of the circumstances presented by an individual applicant — and many of the standards articulated in it are mandatory in the sense that their application will dictate whether an individual will or will not receive benefits.  For example, applicants are required to produce documentation pertaining to prior housing, financial resources and mental or physical impairment (which may necessitate the signing of a medical release) and if they fail to do so without a valid reason (mental or physical impairment), this “constitutes a failure to cooperate” mandating denial of benefits.  Similarly, the procedure specifies that a single adult who has $2,000 of on-hand assets “must utilize his/her resources to reduce or eliminate his/her need for emergency shelter” prior to being eligible for benefits.  Another section directs that “if an applicant has tenancy rights at any housing option, that residence will be deemed the viable housing option and the applicant will be found ineligible, provided there is no imminent threat to health or safety.”  These concrete provisions substantially curtail, if not eliminate, an intake worker’s discretion to grant THA (temporary housing assistance) benefits.  In fact, there are several specific directives in the Eligibility Procedure that appear to compel intake workers to deny benefits based on the presence or absence of a single factor, regardless of other circumstances that might support a determination of eligibility.  The procedure, which is itself mandatory, requires the application of standards that are dispositive of the outcome.  Matter of the Council of the City of New York v The Department of Homeless Services of the City of New York, 193, CtApp 11-26-13

 

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Revocation of Parole Based Upon Uncharged Assault Okay/Presence of Assault Victim at Revocation Hearing Excused

The Third Department determined petitioner’s parole was properly revoked even though the victim of the uncharged assault which triggered the revocation did not testify at the hearing:

Petitioner argues that he improperly was denied the opportunity to confront and cross-examine the victim.  While a “strong preference” for confrontation and cross-examination exists in parole revocation proceedings, the victim’s absence nevertheless may be excused “upon a specific finding of good cause” (…see Executive Law § 259-i [3] [f] [v]…).  Here, the victim refused to testify and could not be located despite extensive efforts by parole officials to do so.  Accordingly, the Administrative Law Judge properly excused her absence and considered other evidence regarding the assault … . Contrary to petitioner’s assertion, the fact the he was not indicted for any crimes stemming from the underlying assault did “not preclude a revocation of parole for the same conduct”… . Matter of Coston v NYS Division of Parole, 515013, 3rd Dept 11-21-13

 

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Revocation of Plumber’s License Too Severe a Penalty

The First Department determined that the NYC Department of Buildings (DOB) imposed too harsh a penalty when it revoked petitioner’s master plumbing license after finding she violated the NYC Building Code:

…[W]e find that the penalty of revocation was excessive upon considering the following factors: the license is petitioner’s sole means of livelihood; this was the only instance of misconduct in an otherwise unblemished history as a licensed master plumber since 2001; there was no resultant harm to the public or the agency; and petitioner seemingly acknowledged the potential for harm when she informed the owner that his worker’s performance was inadequate and proposed that her workers correct the violations … . We note that the record demonstrated that DOB’s precedent indicates that in several other instances where licensees have committed similar acts of misconduct by performing work prohibited by the Code and/or submitting false reports or documents to DOB, which potentially placed the public at greater risk of harm than the misconduct at issue here, the agency imposed far less severe penalties. Matter of Ward v City of New York 2013 NY Slip Op 07569, 1st Dept 11-14-13

 

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Allegations of Economic Injury Not Sufficient to Establish Standing to Challenge Governmental Action Under State Environmental Quality Review Act

The Second Department affirmed Supreme Court’s dismissal of a petition brought by the National Oil Recyclers Association (NORA) challenging the NYC Department of Environmental Protection’s (DEP’s) finding that proposed amendment s to the NYC rules regarding emissions from use of grade numbers 4 and 6 fuel oils would lead to reduced emissions and would have no significant adverse impacts on the quality of the environment.  The court explained that NORA did not have standing to challenge the finding and the DEP’s failure to provide an explanation for not publishing the proposed rules in its yearly regulatory agenda did not invalidate the rules:

To establish standing to challenge governmental action under the State Environmental Quality Review Act (ECL art 8, hereinafter SEQRA), the petitioners must show (1) that they will suffer an environmental injury that is in some way different from that of the public at large, i.e., that there is an “injury in fact,” and (2) that the alleged injury falls within the zone of interest sought to be protected or promoted by the statute under which the governmental action was taken … .

Allegations of potential economic injury alone are insufficient to confer standing under SEQRA … . Here, the first and second causes of action allege the potential of economic harm, but they do not sufficiently allege that the petitioners will suffer an environmental injury that is in some way different from that of the public at large. Such allegations are insufficient to confer standing to assert the first and second causes of action … . Matter of County Oil Co Inc v NYC Dept Envtl Protection, 2013 NY Slip Op 07474, 2nd Dept 11-13-13

 

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Administrative Review of a Rent Overcharge Petition Should Have Been Granted; Allegations of Fraud Overcame Four-Year Statute of Limitations

The First Department, over a dissent, reversed Supreme Court’s dismissal of an Article 78 petition for administrative review of the denial of petitioner’s rent overcharge complaint by the NYS Division of Housing and Community Renewal (DHCR).  Petitioner’s rent was increased from $572 to $1750 a month.  To justify that adjustment, the landlord was required to have spent $39,000 improving the apartment.  Petitioner submitted evidence that supported her position the landlord spent very little on the improvements.  The landlord, however, produced no evidence of what was actually spent and, therefore, there was no basis in the record for the DHCR’s determination that the $1750 rental amount was justified.  The First Department noted that the four-year statute of limitations did not apply because there was substantial evidence of fraud:

Under the standard set forth in Matter of Grimm v State of N.Y. Div. of Hous. & Community Renewal Off. of Rent Admin. (15 NY3d 358 [2010]), petitioner made a sufficient showing of fraud to require DHCR to investigate the legality of the base date rent … . Although the “look-back” for an apartment’s rental history is ordinarily limited to the four-year period preceding the date that the petitioner files the complaint …, where fraud is alleged and there is “substantial indicia of fraud on the record,” DHCR is obliged to investigate whether the base date rate was legal and “act[s] arbitrarily and capriciously in failing to meet that obligation”… .

Thus, we find that DHCR’s disparate treatment of the parties’ claims was arbitrary. While the agency made no attempt to evaluate the legitimacy of petitioner’s claims despite their consistency and degree of detail, DHCR credited the owner’s implicit claim that it spent $39,000 to renovate the apartment simply because “it would not be difficult for anyone with any experience in this industry to believe it could have taken $39,000 … to update the appearance and equipment in an apartment which had not changed hands for thirty-two years.” This justification for the agency’s determination is irrational. Finding that the owner “could have” spent $39,000 …, where the owner never submitted any evidence controverting petitioner’s claims is not equivalent to finding that the owner actually made improvements costing that much. Accordingly, this matter should be remanded to DHCR to give the parties the opportunity to present evidence in connection with the legality of the base rate rent. Matter of Boyd v NYS Division of Housing and Community Renewal…, 2013 NY Slip Op 06966, 1st Dept 10-29-13

 

 

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Physician Can Be Removed from Medicaid Program Irrespective of Action Taken by Bureau of Professional Medical Conduct

In a full-fledged opinion by Judge Read, with two concurring judges, the Court of Appeals determined that the Office of Medicaid Inspector General (OMIG) is authorized to remove a physician from New York’s Medicaid program based on a consent order between the physician and the Bureau of Professional Medical Conduct (BPMC) regardless of whether BPMC chooses to suspend the physician:

In this litigation, Supreme Court annulled OMIG’s determination to terminate petitioner-physician’s participation in the Medicaid program on the basis of a BPMC consent order, and directed his reinstatement.  In the consent order, petitioner-physician pleaded no contest to charges of professional misconduct and agreed to 36 months’ probation.  Upon OMIG’s appeal, the Appellate Division affirmed, holding that it was arbitrary and capricious for the agency to bar petitioner-physician from treating Medicaid patients when BPMC permitted him to continue to practice; and that OMIG was required to conduct an independent investigation before excluding a physician from Medicaid on the basis of a BPMC consent order … .  We subsequently granted OMIG permission to appeal (19 NY3d 813 [2012]).

We disagree with the Appellate Division’s rationale, but affirm because OMIG’s determination was arbitrary and capricious for another reason.  Specifically, OMIG did not explain why the BPMC consent order in this case caused it to exercise its discretion pursuant to 18 NYCRR 515.7 (e) to exclude petitioner-physician from the Medicaid program. * * *

When resolving charges of professional misconduct with BPMC, physicians and their attorneys should be mindful that a settlement with BPMC does not bind OMIG, as petitioner-physician discovered in this case.  Matter of Koch, DO v Sheehan…, 153, CtApp 10-22-13

 

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New Medicaid Reimbursement Procedures Did Not Violate State Administrative Procedure Act

The Third Department affirmed Supreme Court and determined that a modified Medicaid reimbursement procedure for the school supportive health services program (SSHSP) did not violate the State Administrative Procedure Act because the new administrative directives (referred to as Q & A’s) were not new rules triggering the requirements of the Act:

The documentation and reimbursement eligibility requirements reflected in the challenged Q & As were not required to be promulgated as rules under the State Administrative Procedure Act.  For purposes of rule-making notice and filing requirements (see State Administrative Procedure Act § 202), a rule is defined as “the whole or part of each agency statement, regulation or code of general applicability that implements or applies law, or prescribes . . . the procedure or practice requirements of any agency, including the amendment, suspension or repeal thereof” (State Administrative Procedure Act § 102 [2] [a]).  Expressly excluded from the definition are “rules concerning the internal management of the agency which do not directly and significantly affect the rights of or procedures or practices available to the public” (State Administrative Procedure Act § 102 [2] [b] [i]), and “forms and instructions, interpretive statements and statements of general policy which in themselves have no legal effect but are merely explanatory” (State Administrative Procedure Act § 102 [2] [b] [iv]).  The Court of Appeals has recognized “that there is no clear bright line between a ‘rule’ or ‘regulation’ and an interpretative policy” (Cubas v Martinez, 8 NY3d 611, 621 [2007]).  Courts have previously found administrative directives to be interpretive statements when they rely on and constitute reasonable interpretations of existing regulations or statutes, or merely address the type of documentation needed to establish whether a predetermined test of eligibility has been met … .  Board of Education of the Kiryas Joel Village Union Free School District, 516336, 3rd Dept 10-17-13

 

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In College Disciplinary Action, Victim Need Not Testify—Failure to Detail Factual Findings in Determination Violates Due Process

The Third Department, in a disciplinary action by SUNY Cortland, determined the alleged victim of harassment was not the complainant in the disciplinary proceeding and therefore the alleged victim need not testify in the proceeding.  The court, however, determined the school’s failure to set forth detailed factual findings in its disciplinary determination violated the student’s due process rights. The matter was sent back for those factual findings, after which the student could pursue administrative remedies:

We reject petitioner’s contention that the Hearing Panel failed to substantially adhere to its rules and regulations published in the Code … .  Although petitioner correctly notes that the Code requires the “complainant” to present his or her own case, the “complainant” is defined as “any person or persons who have filed disciplinary charges against a student.”  Here, the complainant was SUNY Cortland’s Director of Judicial Affairs.  Thus, petitioner’s contention that the Hearing Panel did not comply with the Code because the victim did not present the case is unavailing.  Furthermore, as the victim was not called as a witness by either side and nothing in the Code establishes that the victim is a party to a disciplinary proceeding, we find that the Hearing Panel substantially complied with its rule requiring it to afford petitioner the opportunity to question all parties.  …
We do agree, however, that petitioner was denied due process because the Hearing Panel failed to set forth detailed factual findings in its disciplinary determination.  In a disciplinary proceeding at a public institution of higher education, due process entitles a student accused of misconduct to “a statement detailing the factual findings and the evidence relied upon by the decision-maker in reaching the determination of guilt” … .   Recognized as one of the “‘rudimentary elements of fair play'” in this context …, “[s]uch a statement is necessary to permit the student to effectively challenge the determination in administrative appeals and in the courts and to ensure that the decision was based on evidence in the record”… . Matter of Boyd v SUNY Cortland, 514925, 3rd Dept 10-17-13

 

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Law School Properly Rescinded Student’s Application for Admission Based Upon Omissions Concerning Criminal Record

The Second Department affirmed a law school’s rescission of admission of a student based upon the student’s responses to a question about criminal charges on the school’s admission form:

When the petitioner endeavored to obtain an advance ruling on his eligibility for and the likelihood of his admission to the New York State bar in light of his conviction, the law school first learned of the original charges that had been asserted against the petitioner, including, inter alia, charges for distribution of LSD in the second degree, possession of LSD with the intent to distribute in the second degree, possession of Ecstasy in the third degree, and possession of Ecstasy with the intent to distribute. The law school then advised the petitioner that he must amend his application for admission and include a full accounting of what transpired with respect to his arrest in July 1999 and an explanation with respect to his failure to initially disclose this information. Although the petitioner advised the law school that the statement in his application concerning his criminal record was not factually incorrect and did not need to be amended, he nonetheless supplemented his application and made available all details and documents surrounding his expunged record. In his supplement, the petitioner acknowledged that he had been arrested for distribution and had knowingly distributed illegal substances, and freely admitted his guilt of that crime, although he maintained that he did not engage in distribution of illegal substances on a regular basis.

The law school’s determination was made on the grounds of the petitioner’s misrepresentations and omissions on his application regarding the extent of his prior criminal background, and was based upon the exercise of discretion after a full review. Despite the petitioner’s subsequent disclosure, under the circumstances presented here, and in light of the true nature of the petitioner’s prior criminal activity, the law school’s determination to rescind his acceptance was not arbitrary and capricious, and does not warrant judicial intervention… . Matter of Powers v St John’s Univ Sch of Law, 2013 NY Slip Op 06688, 2nd Dept 10-16-13

 

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