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Elements of Civil Antitrust Action Under the General Business Law (Donnelly Act) Explained; Corporate Officers Can Be Individually Liable

The Fourth Department determined there were questions of fact re: the civil antitrust action and the related individual liability of corporate officers:

… [T]he court erred in granting those parts of defendants’ motions for summary judgment dismissing the fourth cause of action against them, alleging unfair competition and restraint of trade in violation of General Business Law § 340 (1) (hereafter, Donnelly Act), and we therefore modify the judgment accordingly. … “A party asserting a violation of the Donnelly Act is required to (1) identify the relevant product market; (2) describe the nature and effects of the purported conspiracy; (3) allege how the economic impact of that conspiracy is to restrain trade in the market in question; and (4) show a conspiracy or reciprocal relationship between two or more entities” … . The Court of Appeals has recognized, however, “that neither the Donnelly Act nor the Sherman Act, after which it was modeled, has been interpreted as prohibiting every agreement that has the effect of restraining trade, no matter how minimal. Instead, as construed by State and Federal courts, the antitrust laws prohibit only unreasonable’ restraints on trade” … . * * *

“[C]orporate officer[s] can also be held liable in civil antitrust actions” under the Donnelly Act, and there are triable issues of fact regarding their participation in the alleged corporate antitrust violations … . Radon Corp of Am Inc v National Radon Safety Bd. 2015 NY Slip Op 01365, 4th Dept 2-13-15

 

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Town Board and Police Commission Members Entitled to Immunity and Qualified Privilege Re: Defamation Causes of Action—Criteria Described/Power to Terminate Probationary Police Officer Described

The Fourth Department determined statements attributed to members of the town board and police commission with respect to the reasons for plaintiff’s termination as a probationary police officer were protected by governmental immunity and qualified privilege (explaining the relevant criteria).  In addition, the court explained the power to terminate a probationary police officer:

There is complete immunity from liability for defamation for ” an official [who] is a principal executive of State or local government who is entrusted by law with administrative or executive policy-making responsibilities of considerable dimension’ . . . , with respect to statements made during the discharge of those responsibilities about matters which come within the ambit of those duties” … . Here, the Town Board has the statutory authority to “make, adopt and enforce rules, orders and regulations for the government, discipline, administration and disposition of the police department and of the members thereof” (Town Law § 154) and, as members of the Police Commission, [defendants] were delegated “all the powers relative to police matters conferred upon the town board” (§ 150 [2]). We therefore conclude that Brooks, Sullivan, and Ulinski were entitled to absolute immunity because “members of the Town Board enjoy an absolute privilege against a claim of defamation where . . . the defamatory statements are made in the discharge of their responsibilities about matters within the ambit of their duties” …, and “[t]he privilege of absolute immunity . . . extends to those of subordinate rank who exercise delegated powers’ ” … . …

A qualified privilege arises when a person makes a good[ ]faith, bona fide communication upon a subject in which he or she has an interest, or a legal, moral or societal interest to speak, and the communication is made to a person with a corresponding interest’ ” … . Here, defendants submitted evidence that, at the time of the alleged slanderous communications, Ulinski was a member of the Police Commission and, therefore, had an interest in plaintiff’s performance as a probationary police officer, and that Ulinski made the communications to persons with a corresponding interest in plaintiff’s performance, namely to a member of the Town Board, and to the president of the union that represented plaintiff … . We further conclude that plaintiffs “failed to raise a triable issue of fact whether the statements were motivated solely by malice” … . * * *

As a probationary police officer, plaintiff could be ” dismissed for almost any reason, or for no reason at all[,]’ . . . [and he] had no right to challenge the termination by way of a hearing or otherwise, absent a showing that he was dismissed in bad faith or for an improper or impermissible reason” … . Fiore v Town of Whitestown, 2015 NY Slip Op 01361, 4th Dept 2-13-15

 

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Battery Cause of Action Based Upon the Complete Absence of Consent or Fraudulently Induced Consent Is Not Duplicative of a Dental Malpractice Allegation—Criteria Explained/Questions of Fact Raised Re: the Deceptive Business Practices Cause of Action—Some of the Criteria Explained

The Fourth Department determined the cause of action for battery was not duplicative of the cause of action for dental malpractice because it was based upon the allegations consent to the procedure was completely absent or was fraudulently induced.  In addition, there were questions of fact re: the deceptive business practices cause of action:

…[T]he cause of action asserting the complete absence of consent and/or fraudulently induced consent for treatment is properly treated as one for battery rather than for dental malpractice, and it is not duplicative of the dental malpractice cause of action … . “It is well settled that a medical professional may be deemed to have committed battery, rather than malpractice, if he or she carries out a procedure or treatment to which the patient has provided no consent at all’ ” … . The court properly denied that part of the … defendants’ motion with respect to the battery cause of action, inasmuch as they failed to meet their initial burden of establishing that they “did not intentionally engage in offensive bodily contact without plaintiff’s consent”… . …

A cause of action for deceptive business practices under section 349 “requires proof that the defendant engaged in consumer-oriented conduct that was materially deceptive or misleading, causing injury” … . Even assuming, arguendo, that the … defendants met their initial burden by establishing that the underlying transaction was private in nature and the allegedly deceptive acts were not aimed at the public at large …, we conclude that plaintiff’s submissions raised issues of fact concerning whether the … defendants engaged in a scheme to place profits before patient care, which allegedly included fraudulent practices that impacted consumers at large beyond a particular dentist’s treatment of an individual patient … . Matter of Smiles, 2015 NY Slip Op 01362, 4th Dept 2-13-15

 

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“Local Authority,” Within the Meaning of the Public Authorities Law, Defined

The Fourth Department determined petitioner, Operation Oswego County, was a “local authority” subject to reporting and oversight requirements of respondent, the New York Authorities Budget Office.  The court defined what a “local authority” is:

A “local authority” under the Public Authorities Law includes “a not-for-profit corporation affiliated with, sponsored by, or created by a county, city, town or village government” (§ 2 [2] [b]). Petitioner is a not-for-profit corporation that acts as a local development corporation by establishing and implementing economic development strategies for Oswego County (County). We agree with respondent that petitioner is a local authority inasmuch as it is affiliated with and/or sponsored by the County … . The record establishes that the County regularly gives grants to petitioner, which comprise the majority of its budget. …[T]he term “sponsor” means, inter alia, ” a person or an organization that pays for or plans and carries out a project or activity’ ” (id. at 1404, quoting Merriam-Webster On-line Dictionary [emphasis added]). The County has also given interest-free loans to petitioner. Furthermore, a County official serves as a voting member of petitioner’s board, and several County officials serve as ex-officio, non-voting members of petitioner’s board. Considering the totality of the circumstances …, we conclude that petitioner is a local authority as defined in the Public Authorities Law. Matter of Operation Oswego County Inc v State of New York Auths Budget Off, 2015 NY Slip Op 01358, 4th Dept 2-13-15

 

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Lowering Health Insurance Benefits for School-District Retirees Below Level Afforded Active Employees Violated the Insurance Moratorium Statute

The Fourth Department determined lowering the health insurance benefits for retired school district employees below the level of benefits afforded active employees violated the Insurance Moratorium Statute:

The moratorium statute sets a minimum baseline or “floor” for retiree health benefits, and that “floor” is measured by the health insurance benefits received by active employees … . In other words, the moratorium statute does not permit an employer to whom the statute applies to provide retirees with lesser health insurance benefits than active employees … . Matter of Anderson v Niagara Falls City School Dist, 2015 NY Slip Op 01098, 4th Dept 2-6-15


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Order Granting a Motion In Limine Is Appealable If It Effectively Limits the Presentation of a Legal Theory at Trial

The Fourth Department determined the order granting defendant's motion in limine was appealable because the order limited the theories available for use at trial, not merely the admissibility of evidence (which would not be appealable).  The Fourth Department found that the motion in limine should not have been granted because it effectively precluded plaintiffs from introducing evidence of continuous representation which may have tolled the statute of limitations in this legal malpractice action:

In the order on appeal, the court granted defendants' motions to preclude plaintiffs from introducing evidence that any of the defendants represented plaintiffs with respect to any issue other than an issue in the context of a medical malpractice action against a physician. The effect of that order was to limit plaintiffs to introducing evidence that, in 1994, one of the defendants made a statement to Gary M. Dischiavi (plaintiff) indicating that the medical malpractice action was not viable.

We note at the outset that, although the parties do not address the appealability of this order determining a motion in limine, we conclude that plaintiffs may appeal from the order at issue … . “Generally, an order ruling [on a motion in limine], even when made in advance of trial on motion papers constitutes, at best, an advisory opinion which is neither appealable as of right nor by permission” … . This Court has noted, however, that “there is a distinction between an order that limits the admissibility of evidence,' which is not appealable . . . , and one that limits the legal theories of liability to be tried' or the scope of the issues at trial, which is appealable” … . Here, the order precluded the introduction of the vast majority of the evidence on the issue whether defendants continued to represent plaintiffs so as to toll the statute of limitations, and thus it is appealable because it limits the scope of the issues at trial … . Dischiavi v Calli, 2015 NY Slip Op 01116, 4th Dept 2-6-15

 

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“Arbitrary and Capricious” Defined/Criteria for Elimination of a Public-Employee Position Explained

In affirming the school district's actions in creating a new position and eliminating an existing position, the Fourth Department explained the relevant review standards:

“The arbitrary or capricious test chiefly relates to whether a particular action should have been taken or is justified . . . and whether the administrative action is without foundation in fact' . . . Arbitrary action is without sound basis in reason and is generally taken without regard to the facts… . * * *

“It is well established that a public employer may abolish civil service positions for the purposes of economy or efficiency . . . , but it may not act in bad faith in doing so . . . , nor may it abolish positions as a subterfuge to avoid the statutory protection afforded civil servants before they are discharged . . . A petitioner challenging the abolition of his or her position must establish that the employer in question acted in bad faith” … . Matter of Ifedigbo v Buffalo Pub Schools, 2015 NY Slip Op 01125, 4th Dept 2-6-15


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Regulation Properly Promulgated—Analytical Criteria Described in Some Depth

In finding that a regulation promulgated by the Department of Health (DOH) was a valid exercise of regulatory authority, the Fourth Department noted that an agency need not rely on empirical studies when it adopts a regulation, but rather can rely on the expertise and experience of the agency.  The challenged regulation limited a specific type of Medicaid-reimbursement to nursing homes pending an audit:

…DOH had statutory authority to promulgate 10 NYCRR 86-2.40 (m) (10) under Public Health Law § 2808 (2-c) (d) and … the regulation was not ” out of harmony' with an applicable statute” … . Although section 2808 (2-c) (d) does not explicitly authorize prepayment audits of residential health care facilities, “an agency can adopt regulations that go beyond the text of that legislation, provided that they are not inconsistent with the statutory language or its underlying purposes” … . Moreover, we reject petitioners' contention that DOH usurped the role of the legislature by adopting 10 NYCRR 86-2.40 (m) (10). DOH has “inherent authority to protect the quality and value of services rendered by [Medicaid] providers” … and, therefore, we conclude that DOH did not “stretch[ ] [the enabling statute] beyond its constitutionally valid reach” by adopting a regulation that allows a prepayment audit of Medicaid claims under certain circumstances … .

…10 NYCRR 86-2.40 (m) (10) “has a rational basis and is not unreasonable, arbitrary or capricious” … . Contrary to petitioners' contention, DOH is not required to rely upon empirical studies when it adopts a regulation. “Although documented studies often provide support for an agency's rule making, such studies are not the sine que non of a rational determination” … . Thus, “the commissioner [of DOH] . . . is not confined to factual data alone but also may apply broader judgmental considerations based upon the expertise and experience of the agency he [or she] heads” … . Here, DOH adopted 10 NYCRR 86-2.40 (m) (10) to “[e]nsure the accuracy and integrity of Medicaid rates that are adjusted for case mix data” (NY Reg, Jan. 2, 2013, at 16), and we conclude that adoption of the regulation was within DOH's authority in order to ” assure[] that the funds which have been set aside for (providing medical services to the needy) will not be fraudulently diverted into the hands of an untrustworthy provider of services' ” … . Matter of Adirondack Health-Uijlein Living Ctr v Shah, 2015 NY Slip Op 01073, 4th Dept 2-6-15


Commercial Property Overvalued—Evidentiary Criteria Explained In Some Depth

The Fourth Department determined three commercial properties had been overvalued for real property tax purposes.  The court discussed the relevant evidentiary criteria in considerable depth:

…[P]etitioners met their initial burden of presenting “substantial evidence that the propert[ies were] overvalued” …, thereby rebutting the “presumption of validity [that] attaches to the valuation of property made by the taxing authority” … . “In the context of tax assessment cases, the substantial evidence' standard merely requires that petitioner demonstrate the existence of a valid and credible dispute regarding valuation” … . “The ultimate strength, credibility or persuasiveness of petitioner's arguments are not germane during this threshold inquiry” … . Here, petitioners submitted appraisals by a qualified expert who valued the subject properties utilizing the income capitalization approach to valuation, which is “generally regarded as the preferred method for determining the value of income-producing propert[ies]” such as those at issue in this case …. Further, the appraisals “contained documentation and calculations to support the underlying methodolog[y] and the ultimate valuation” … . “The fact that some aspects of [the expert]'s valuation methodology may be subject to question goes to the weight to be accorded the appraisal[s] and not to the threshold issue of whether petitioner[s] produced substantial evidence to rebut the presumption of validity' … .

… It is well established that “valuation [is] largely a question of fact, and the [trial] courts have considerable discretion in reviewing the relevant evidence as to the specific propert[ies] before them” … . “As a general rule, actual rental income is often the best indicator of value” … , although actual income ” may be disregarded where it does not reflect full value' ” … . Here, there is no evidence that the rents petitioners charged were arbitrary or the result of collusion or self-dealing …, and respondents “failed to establish that the actual income was not reflective of the market for the years under review” … . * * *

“The ultimate purpose of valuation . . . is to arrive at a fair and realistic value of the property involved” … . The income capitalization approach to valuation “rests on the proposition that the value of income-producing property is the amount a willing buyer, desiring but not compelled to purchase it as an investment, would be prepared to pay for it under ordinary conditions to a seller who desires, but is not compelled, to sell . . . That amount will depend on the net income the property will likely produce inasmuch as the purchase price represents the present worth of anticipated future benefits” … . Here, the ” net income the property will likely produce' ” …, at least for the next 30 years, is the amount of the ground lease. Matter of Techniplex III v Town & Vil of E Rochester, 2015 NY Slip Op 01101, 4th Dept 2-6-15


Mother’s Actions and Mental Health Issues Did Not Warrant a Finding of Neglect

The Fourth Department determined mother's actions and mental health issues did not support Family Court's neglect-finding.  The mother had left her child with appropriate caregivers and kept in touch, although she was absent longer than expected:

“[A] party seeking to establish neglect must show, by a preponderance of the evidence . . . , first, that [the] child's physical, mental or emotional condition has been impaired or is in imminent danger of becoming impaired and second, that the actual or threatened harm to the child is a consequence of the failure of the parent . . . to exercise a minimum degree of care in providing the child with proper supervision or guardianship” (…see Family Ct Act §§ 1012 [f] [i]; 1046 [b] [i]). “Where a motion is made by the respondent at the close of the petitioner's case to dismiss a neglect petition, [the court] must determine whether the petitioner presented a prima facie case of neglect . . . , viewing the evidence in [the] light most favorable to the petitioner and affording it the benefit of every inference which could be reasonably drawn from the proof presented” … .

We conclude that, viewing the evidence in the light most favorable to petitioner, the evidence established that the mother left the child with appropriate caregivers, who agreed to care for the child for several days; however, she left the state for approximately 24 hours, and she failed to provide a medical authorization in case of an emergency. Further, although the male caregiver was unable to reach the mother during the confrontation with the mother's grandmother, petitioner's evidence established that the mother had borrowed a telephone and had remained in contact with the caregivers each day that she was away. The evidence also established that the mother was inexperienced as a parent and that the couple with whom she lived was assisting her with parenting skills and in obtaining appropriate housing, as well as medical and other benefits.

We conclude that petitioner failed to establish that, as a result of the mother's actions, the child was in imminent danger, i.e., “near or impending [danger], not merely possible” … . We further conclude that petitioner failed to present any evidence connecting the mother's alleged mental health condition to any actual or potential harm to the child … . We therefore conclude that petitioner failed to establish by a preponderance of the evidence that the child's physical, mental or emotional condition had been impaired or was in imminent danger of becoming impaired as a result of the mother's failure to exercise a minimum degree of care for the child … . Matter of Lacey-Sophia TR, 2015 NY Slip Op 01123, 4th Dept 2-6-15


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