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Local Law, Which Regulates the Conduct of Attorneys Who Regularly Engage in (Nonlegal) Activities Traditionally Performed by Debt Collectors, Not Preempted by the Judiciary Law

The Court of Appeals, over a two-judge dissent, answering a certified question from the Second Circuit, determined that New York City’s Local Law 15, which regulates debt-collection practices, including some debt-collection practices used by attorneys, was not preempted by the Judiciary Law. The Local Law only reaches attorneys who regularly engage in activities traditionally performed by debt collectors. The court found no conflict between the Local Law and the Judiciary Law (no “conflict” preemption). And the court found that the Judiciary Law does not evince an intent to preempt the field of regulating nonlegal services performed by attorneys (no “field” preemption):

Local Law 15, enacted in 2009, amended the debt collection legislation in several ways. Significantly, it expanded the definition of “debt collection agency” to “include a buyer of delinquent debt who seeks to collect such debt either directly or through the services of another by, including but not limited to, initiating or using legal processes or other means to collect or attempt to collect such debt” (Administrative Code of City of NY § 20-489 [a]). The amendments continued a limited exemption for attorneys or law firms that were “collecting a debt in such capacity on behalf of and in the name of a client solely through activities that may only be performed by a licensed attorney” (Administrative Code of City of NY § 20-489 [a][5]). The exemption, however, did not cover “any attorney-at-law or law firm or part thereof who regularly engages in activities traditionally performed by debt collectors, including, but not limited to, contacting a debtor through the mail or via telephone with the purpose of collecting a debt or other activities as determined by rule of the commissioner” (Administrative Code of City of NY § 20-489 [a][5]). * * *

Plaintiffs assert both conflict and field preemption in connection with the argument that Local Law 15 is preempted by the Judiciary Law. The Local Law, by its terms, governs the conduct of debt collection agencies. Although attorneys that are acting in a debt collecting capacity may fall within its penumbra, it does not purport to regulate attorneys as such. In fact, it clearly states that it does not pertain to attorneys who are engaged in the practice of law on behalf of a particular client. There is no express conflict between the broad authority accorded to the courts to regulate attorneys under the Judiciary Law and the licensing of individuals as attorneys who are engaged in debt collection activity falling outside of the practice of law and, thus, the Local Law does not impose an additional requirement for attorneys to practice law. Rather, the regulatory schemes can be seen as complementary to, and compatible with, one another. * * *

The courts’ authority to regulate attorney conduct does not evince an intent to preempt the field of regulating nonlegal services rendered by attorneys. “Intent to preempt the field may ‘be implied from the nature of the subject matter being regulated and the purpose and scope of the State legislative scheme, including the need for State-wide uniformity in a given area'” (People v Diack, 24 NY3d 674, 679 [2014] [citations omitted]). Although the courts may have preempted the field of regulating attorney misconduct, that authority does not extend to all nonlegal aspects of attorney behavior, which can be governed by both civil and criminal law, including regulatory proscriptions. To the extent that the courts have exercised some authority over nonlegal services provided by attorneys (see Rules of Professional Conduct 5.7), the regulation in that area is not “so detailed and comprehensive so as to imply that” the field has been preempted … . Eric M. Berman, P.C. v City of New York, 2015 NY Slip Op 05594, CtApp 6-30-15

 

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“Continuity” Element of a Criminal Enterprise Explained—Substantive Arguments Re: the Erroneous Use of “And” Instead of “Or” In the Jury Instructions and the “Ineffective Assistance” Stemming from the Failure to Object to the Instructions–the Majority Held the Error Was Not Preserved and the Seriousness of the Error Was Not So Clear-Cut as to Implicate Ineffective Assistance–the Dissent Argued the Jury-Instruction Error Was Preserved and Was Reversible

The Court of Appeals, in a full-fledged opinion by Judge Fahey, over a dissent, affirmed the defendants’ enterprise corruption convictions. The enterprise here involved a doctor and a chiropractor (the defendants), medical clinics, faked accidents, faked injuries, kickbacks to lawyers, fraudulent insurance claims, etc. The court explained that there is no requirement that the People prove the enterprise would continue in the absence of a key participant to demonstrate the “continuity” element of the enterprise, i.e., that the “structure [of the enterprise is] distinct from the predicate illicit pattern.” In addition, the majority determined an acknowledged jury-instruction error (using “and” instead of “or”) was unpreserved, and rejected an ineffective assistance argument which was based on the failure to object to the erroneous jury charge.  In rejecting the ineffective assistance argument, the majority noted that whether the jury-instruction error was reversible was a close question. If the error had been clearly reversible, the majority explained, the ineffective assistance argument would have prevailed. The dissent argued that the jury-instruction error was preserved and constituted reversible error. The jury-instruction and ineffective assistance discussions, like the enterprise corruption discussion, are extensive and substantive.  With respect to the proof requirements for the “continuity” element of enterprise corruption, the court wrote:

Were the People required to prove, beyond a reasonable doubt, that a criminal enterprise would survive the removal of a key participant, it would be impossible in most cases to demonstrate the existence of a criminal enterprise. Except where the leading participant was in fact removed some time before the enterprise disbanded, the People would be expected to prove an unknowable proposition concerning a counterfactual scenario in which events occurred differently from the actual world. We have never required such an exercise. Moreover, there is no reason to treat a criminal structure as less deserving of enhanced penalty if its key figure is so essential to the organization that his or her absence would threaten its criminal agenda. A criminal enterprise is no less a criminal enterprise if it has a powerful leader. Finally, if we were to require a criminal enterprise to be able to survive the removal of a key figure, criminal organizations could avoid enhanced penalties simply by placing all control in the hands of one person. It cannot have been the intent of the Legislature to allow such a loophole.

Instead, what is meant by the continuity element of the statute is that to be a criminal enterprise, an organization must continue “beyond the scope of individual criminal incidents” (Penal Law § 460.10 [3]), and must possess “constancy and capacity exceeding the individual crimes committed under the association’s auspices or for its purposes” … . In other words, the requirement is not that the group would continue in the absence of a key participant, but rather that it continues to exist beyond individual criminal incidents. A team of people who unite to carry out a single crime or a brief series of crimes may lack structure and criminal purpose beyond the criminal actions they carry out; such an ad hoc group is not a criminal enterprise. If a group persists, however, in the form of a “structured, purposeful criminal organization” (id. at 659), beyond the time required to commit individual crimes, the continuity element of criminal enterprise is met. People v Keschner, 2015 NY Slip Op 05596, CtApp 6-30-15

 

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City Had Not Impliedly Dedicated Certain Parcels of Land as Public Parklands—Therefore the Parcels, Which Had Been Used as Public Parks, Were Not Protected by the Public Trust Doctrine and Could Be Sold by the City Without the Approval of the State Legislature

The Court of Appeals determined certain city-owned parcels of land which had been used as public parkland had not been impliedly dedicated as public parklands.  Therefore the parcels were not under the protection of the public trust doctrine and could be sold by the city without the approval of the state legislature:

In support of their appeal, petitioners again advance their argument that the City’s actions manifest its intent to impliedly dedicate the parcels as parkland. Under the public trust doctrine, a land owner cannot alienate land that has been impliedly dedicated to a public use without obtaining the approval of the Legislature … . A party seeking to establish such an implied dedication and thereby successfully challenge the alienation of the land must show that: (1) “[t]he acts and declarations by the land owner indicating the intent to dedicate his land to the public use [are] unmistakable in their purpose and decisive in their character to have the effect of a dedication” and (2) that the public has accepted the land as dedicated to a public use … .

It remains an open question whether the second prong of the implied dedication doctrine applies to a municipal land owner, but we need not and do not resolve that issue on this appeal because we conclude that the City’s acts are not an unequivocal manifestation of an intent to dedicate the parcels as permanent parkland. With respect to the element of the owner’s intent — the only matter contested in this appeal — if a landowner’s acts are “equivocal, or do not clearly and plainly indicate the intention to permanently abandon the property to the use of the public, they are insufficient to establish a case of dedication” … . * * *

Here, as the Appellate Division noted, several documents created prior to this litigation demonstrate that the City did not manifest an unequivocal intent to dedicate the contested parcels for use as public parks. The permit, memorandum of understanding and lease/license relating to Mercer Playground, LaGuardia Park and LaGuardia Corners Gardens, respectively, show that “any management of the parcels by the [DPR] was understood to be temporary and provisional” … . Thus, those documents’ restrictive terms show that, although the City permitted and encouraged some use of these three parcels for recreational and park-like purposes, it had no intention of permanently giving up control of the property. And, as the Appellate Division observed, “the City’s “refus[al of] various requests to have the streets de-mapped and re-dedicated as parkland” … further indicates that the City has not unequivocally manifested an intent to dedicate the parcels as parkland. Matter of Glick v Harvey, 2015 NY Slip Op 05593, CtApp 6-30-15

 

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The People Were Required to Give Pre-Trial Notice of an Out-of-Court Identification of Defendant by Officer Viewing the Controlled Buy from Across the Street—Identification Was Not So Free From the Risk of Undue Suggestiveness that It Could Be Considered Merely “Confirmatory”—Error Was Harmless In the Face of Overwhelming Evidence

The Court of Appeals, in a full-fledged opinion by Judge Pigott, determined the People were required to provide the pre-trial statutory notice of the intent to introduce evidence of an out-of-court identification of the defendant by the officer (Detective Vanacore) who viewed the underlying controlled drug purchase (by an undercover officer) from across the street. The error was deemed harmless however.  Noting that the identification at issue was not so free from the risk of undue suggestiveness as to render the identification merely “confirmatory,” the court offered a clear explanation of the reasons for the statutory pre-trial notice requirement:

“CPL 710.30 could not be clearer” … . When the People intend to offer at trial “testimony regarding an observation of the defendant either at the time or place of the commission of the offense or upon some other occasion relevant to the case, to be given by a witness who has previously identified him as such,” the statute requires the People to notify the defense of such intention within 15 days after arraignment and before trial (CPL 710.30 [1] [b]). Not only is “[t]he statutory mandate . . . plain” but the procedure is “simple” … . The People serve their notice upon defendant, the defendant has an opportunity to move to suppress and the court may hold a Wade hearing (see id.). If the People fail to provide notice, the prosecution may be precluded from introducing such evidence at trial.

The notice statute was “a legislative response to the problem of suggestive and misleading pretrial identification procedures” … . In enacting the notice requirement, the Legislature “attempt[ed] to deal effectively with the reality that not all police-arranged identifications are free from unconstitutional taint” … .

The purpose of the notice requirement is two-fold: it provides the defense with “an opportunity, prior to trial, to investigate the circumstances of the [evidence procured by the state] and prepare the defense accordingly” and “permits an orderly hearing and determination of the issue of the fact . . . thereby preventing the interruption of trial to challenge initially the admission into evidence of the [identification]” … . Thus, the statute contemplates “pretrial resolution of the admissibility of identification testimony where it is alleged that an improper procedure occurred” … . * * *

Detective Vanacore’s surveillance of defendant does not constitute an “observation of . . . defendant . . . so clear that the identification could not be mistaken” thereby obviating the risk of undue suggestiveness … . Therefore, the People were required to serve their notice concerning Detective Vanacore’s observations. People v Pacquette, 2015 NY Slip Op 05595, CtApp 6-30-15

 

Entering the Victim’s Domicile With the Intent to Assault the Victim Who Died from His Injuries Constitutes Felony Murder (Murder Committed During a Burglary)

The Court of Appeals, in a full-fledged opinion by Judge Abdus-Salaam, determined defendant’s felony murder conviction should stand. There was evidence the defendant entered the victim’s apartment intending to assault, not kill, the victim. Therefore the defendant’s causing the death of the victim in the course of the burglary constituted felony murder. The question whether entering the apartment with the intent to kill, and thereafter killing the victim, would also constitute felony murder remains unanswered. The court rejected defendant’s argument that the felony murder statute requires that the death be caused in order to advance the underlying felony, finding that the statute requires only a logical nexus between a murder and a felony:

Noting the Legislature’s inclusion of burglary of all degrees, without qualification, as a predicate felony for felony murder, we observed “that persons within domiciles are in greater peril from those entering the domicile with criminal intent, than persons on the street who are being subjected to the same criminal intent. Thus, the burglary statutes prescribe greater punishment for a criminal act committed within the domicile than for the same act committed on the street” … . It is clear that the Legislature chose to treat burglary differently than other crimes. Therefore, an individual who approaches another on the street with an intent to assault but causes the death of that person could be convicted of manslaughter, but not felony murder. It is entirely reasonable, however, that a person — like defendant — who unlawfully enters a building with the intent to commit an assault therein, but causes the death of another, may be convicted of felony murder, in recognition that the homicide occurs in the context of other criminal activity that enhances the seriousness of the offense. * * *

Defendant also argues that his felony murder conviction rests on legally insufficient evidence because there is no evidence that he committed the murder “in the furtherance of” a burglary. He asserts that the statutory language “in the furtherance of” requires that the death be caused in order to advance or promote the underlying felony. We have not interpreted “in the furtherance of” so narrowly. The felony murder statute is intended to punish a perpetrator for a death he or she caused during the commission of a felony, but not a death that is coincidental to the felony … . The “in furtherance of” element requires “a logical nexus between a murder and a felony” … . Here, there is a clear logical nexus between defendant’s felony of unlawfully entering the victim’s apartment to assault him and the homicide, which was certainly not coincidental. People v Henderson, 2015 NY Slip Op 05592, CtApp 6-30-15

 

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No Appeal to the Court of Appeals Lies from the Appellate Division’s Affirmance of the Denial of Resentencing Pursuant to the 2004 Drug Law Reform Act (DLRA)

The Court of Appeals determined no appeal lies from the Appellate Division’s affirmance of the denial of resentencing pursuant to the 2004 Drug Law Reform Act (DLRA). The fact that the order (denying resentencing) was consolidated with appealable orders did not confer jurisdiction to hear the appeal upon the Court of Appeals:

“It is well established that no appeal lies from a determination made in a criminal proceeding unless specifically provided for by statute,” and courts “may not resort to interpretative contrivances to broaden the scope and application of statutes” governing the availability of an appeal … . [W]e have held that no statutory provision authorizes a defendant to appeal from an Appellate Division order affirming the denial of the defendant’s resentencing application pursuant to the 2005 Drug Law Reform Act … . The 2004 DLRA includes similar language relating to appeals; accordingly, no appeal lies from an order of the Appellate Division affirming the denial of a resentencing application under the 2004 DLRA … . Faced with this barrier to our review, defendant contends that the Appellate Division’s consolidation of the order denying resentencing with other, appealable orders, transformed the nonappealable order into one that we may consider. We disagree. The Appellate Division’s authority to consolidate appeals stems from its inherent authority to administer and manage its proceedings. The Appellate Division’s use of this inherent authority does not expand or modify the scope of our jurisdiction, which is established by statute. People v Lovett, 2015 NY Slip Op 05512, CtApp 6-25-15

 

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In the Face of Defendant’s Claims Defense Counsel Did Not Adequately Represent Him, Counsel’s Answering the Judge’s Questions About Defendant’s Allegations (Which Were Rejected by the Court) Did Not Place Defense Counsel in a Position Adverse to the Defendant’s

The Court of Appeals, in a full-fledged opinion by Judge Stein, determined that defense counsel’s answering the judge’s questions about his performance did not place the attorney in a position adverse to his client’s.  The client, prior to trial, sought the appointment of new counsel by filing a form (“Affidavit in Support of Motion for Reassignment of Counsel”) circling every reason for the appointment of new counsel listed on the form, including the failure to discuss strategy, the failure to seek discovery, the failure to contest identification evidence, and the failure to communicate with the defendant. The form did not reach the judge until after the defendant’s trial and conviction. The defendant did not mention the motion or his concerns during the trial.  The judge, based on his observations during the trial, determined many of the circled claims on the form were not true. The judge asked the attorney about what he had done prior to trial and the attorney explained what he had done.  In so doing, the attorney did not take a position adverse to the defendant’s:

“The right of an indigent criminal defendant to the services of a court-appointed lawyer does not encompass a right to appointment of successive lawyers at defendant’s option” … . A defendant may be entitled to new counsel, however, “upon showing good cause for a substitution, such as a conflict of interest or other irreconcilable conflict with counsel” (id. [internal quotation marks omitted]). Here, defendant claims that he was entitled to new defense counsel because counsel’s responses to the allegations of ineffectiveness created an actual conflict of interest.

Although an attorney is not obligated to comment on a client’s pro se motions or arguments, he may address allegations of ineffectiveness “when asked to by the court” and “should be afforded the opportunity to explain his performance” … .

We have held that counsel takes a position adverse to his client when stating that the defendant’s motion lacks merit …, or that the defendant, who is challenging the voluntariness of his guilty plea, “made a knowing plea . . . [that] was in his best interest” … . Conversely, we have held that counsel does not create an actual conflict merely by “outlin[ing] his efforts on his client’s behalf” … and “defend[ing] his performance” … .

Applying these settled principles to the facts in this case, we conclude that defense counsel’s comments in response to the judge’s questions did not establish an actual conflict of interest. Defense counsel did not suggest that his client’s claims lacked merit. Rather, he informed the judge when he met with defendant and for how long, what they discussed, what the defense strategy was at trial and what discovery he gave or did not give to defendant. Thus, he never strayed beyond a factual explanation of his efforts on his client’s behalf.  People v Washington, 2015 NY Slip Op 05511, CtApp 6-25-15

 

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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

 

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Unambiguous Language in Rider Covered Loss Caused by Hackers Gaining Unauthorized Access to the Insured’s Computers, Not Loss Caused by Fraudulent Billing Entries by Authorized Users

The Court of Appeals, in a full-fledged opinion by Judge Rivera, determined the rider in a financial institution bond covered loss caused by hackers gaining access to the insured’s computer system, not loss caused by the entry of fraudulent billing information into the computer system by authorized users.  Here fraudulent medical claims made by authorized users of the computer system cost the insured (Universal) $18 million. The language of the relevant rider was deemed unambiguous:

… [W]e conclude that it unambiguously applies to losses incurred from unauthorized access to Universal’s computer system, and not to losses resulting from fraudulent content submitted to the computer system by authorized users. The term “fraudulent” is not defined in the Rider, but it refers to deceit and dishonesty (see Merriam Webster’s Collegiate Dictionary [10th ed 1993]). While the Rider also does not define the terms “entry” and “change,” the common definition of the former includes “the act of entering” or “the right or privilege of entering, access,” and the latter means “to make different, alter” (id.). In the Rider, “fraudulent” modifies “entry” or “change” of electronic data or computer program, meaning it qualifies the act of entering or changing data or a computer program. Thus, the Rider covers losses resulting from a dishonest entry or change of electronic data or computer program, constituting what the parties agree would be “hacking” of the computer system. The Rider’s reference to “fraudulent” does not also qualify what is actually acted upon, namely the “electronic data” or “computer program” itself. The intentional word placement of “fraudulent” before “entry” and “change” manifests the parties’ intent to provide coverage for a violation of the integrity of the computer system through deceitful and dishonest access.

Other language in the Rider confirms that the Rider seeks to address unauthorized access. First, the Rider is captioned “Computer Systems,” and the specific language at issue is found under the subtitle “Computer Systems Fraud.” These headings clarify that the Rider’s focus is on the computer system qua computer system. Second, under “EXCLUSIONS,” the Rider exempts from coverage losses resulting directly or indirectly from fraudulent instruments “which are used as source documentation in the preparation of Electronic Data, or manually keyed into a data terminal.” If the parties intended to cover fraudulent content, such as the billing fraud involved here, then there would be no reason to exclude fraudulent content contained in documents used to prepare electronic data, or manually keyed into a data terminal. Universal Am. Corp. v National Union Fire Ins. Co. of Pittsburgh, PA., 2015 NY Slip Op 05516, CtApp 6-25-15

 

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Although a Close Case, the Evidence Supported Defendant’s Manslaughter Conviction Under an Accomplice Theory—the Judge’s Informing the Jury of the Correct Dates of the Offense, Outside the Presence of the Parties, with the Parties’ Consent, Was Not a Mode of Proceedings Error Requiring Reversal

Noting that it was a close case, the Court of Appeals determined the evidence supported defendant’s conviction for manslaughter under an accomplice theory.  Defendant struck the victim with a beer bottle and then chased after another man.  There was conflicting testimony about whether defendant was present when another man who was with the defendant struck the victim with a baseball bat.  Viewing the evidence in the light most favorable to the People, the evidence of a “community of purpose” among accomplice and principal was sufficient.  Further, the court determined the judge’s correcting an error in the jury instructions by informing the jury of the correct dates of the offenses outside the presence of the parties, but with the parties’ consent, was not a mode of proceedings error requiring reversal. People v Scott, 2015 NY Slip Op 04874, CtApp 6-11-15

 

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