Appellate Division reverses Supreme Court's dismissal of Petitioner's complaint alleging racial discrimination within the meaning of New York City's Human Rights Law

Supreme Court granted City of New York's [City] and another named defendant's, a police sergeant [Sergeant], post-answer motion to dismiss Plaintiff's complaint of unlawful discrimination, dismissing the Plaintiff's complaint alleging racial discrimination within the meaning of  New York City' Human Rights Law (City HRL). 

The Appellate Division unanimously reversed, on the law, without costs, the City's and the Sergeant's motions and reinstated the Plaintiff's complaint.

The Appellate Division held that Plaintiff had stated a cause of action for racial discrimination under the City HRL, noting that Sergeant had made many statements, both in the office of the NYPD Auto Crimes Unit and on a text thread with his subordinates including Plaintiff, criticizing racial justice protests in the National Football League [NFL] by Colin Kaepernick and other NFL players. On one occasion, Plaintiff, who is Black, told Sergeant "that the players had a constitutional right to protest" Sergeant responded "yeah, . . .but it's my right . . . if I want to like [B]lack people." Sergeant also shared articles about Black NFL players committing crimes and described them as "perps."

Citing Golston-Green v City of New York, 184 AD3d 24, the Appellate Division opined that viewing the record in the light most favorable to  Plaintiff, it cannot be said as a matter of law "that the [Sergeant's] conduct of the [Plaintiff] complained of was truly insubstantial" or amounted to "a petty slight or trivial inconvenience". In the words of the Appellate Division, Sergeant's remark that he has a "right [whether] to like [B]lack people," directed at Plaintiff "was facially discriminatory and is alone sufficient to defeat summary judgment".

Noting under the City's HRL Sergeant had a "right to express his . . . views" on matters of public concern, provided, however, that in so doing "he [did] not discriminate against his [subordinates] employees based on a protected characteristic."

Concluding that Plaintiff's hostile work environment claim was timely as the record contains text messages Sergeant had sent concerning Black NFL players through January 26, 2019, and the complaint was filed on December 13, 2021, within the period allowed under the statute of limitations, the Appellate Division noted that Sergeant's "earlier comments are actionable because they were 'part of a single continuing pattern . . . extending into the [limitations] period'".

The Appellate Division also held that to "the extent [Plaintiff] claims that the assignment to the potentially dangerous arrest was unlawful because of his restricted duty status, that claim was untimely as the result of Plaintiff's failure to comply with the requirements of General Municipal Law §205-e. The Appellate Division then opined that the arrest assignment at issue may be have "amounted to unequal treatment based on race".

Click HERE to access the Appellate Division's decision posted on the Internet.

The State of New Jersey's Consumer Fraud Act held not applicable to attorneys and arbitral tribunals performing professional services

The Appellate Division, noting that Plaintiffs in this action never identified the legal theory being asserted in their instant action, opined that "Supreme Court properly dismissed [Plaintiffs'] third cause of action", which referenced the State of New Jersey's Consumer Fraud Act [NJCFA].*

Noting that that the Defendants in the instant action were acting as arbitrators, the Appellate Division opined that "putting aside the impropriety of Plaintiffs' post hoc effort to recast the cause of action as an NJCFA claim", the State of New Jersey's "NJCFA does not apply to learned professionals such as attorneys and arbitral tribunals when they are performing professional services". 

Citing Pollak v Moore, 85 AD3d 578, the Appellate Division also found that Plaintiffs provided no basis for either Supreme Court or the Appellate Division to grant leave to serve a second amended complaint on Defendants, explaining that Plaintiff's "provided no proposed pleading, nor did they allege any new facts that would overcome the deficiencies in [their earlier] amended complaint."

* See NJ Stat Ann 56:8-2.

Click HERE to access the Appellate Division's decision posted on the Internet.

New York State's Comptroller posts municipal audits on the Internet

On May 14, 2026, New York State Comptroller Thomas P. DiNapoli posted audits of the municipalities listed below on the Internet.

Click on the text highlighted in COLOR to access the audit

Village of Coxsackie – Treasurers’ Records and Reports (Greene County) The treasurers did not maintain complete, accurate and timely records and reports or adhere to generally accepted accounting principles. Auditors identified transactions totaling $420,215 that were not recorded, $236,921 that were incorrectly recorded and $91,741 that were recorded twice in the accounting records. As a result, the board’s ability to properly and effectively monitor and manage the village’s financial operations was reduced. Additionally, the board did not annually audit the treasurers’ records to ensure they were accurate, complete and maintained in a timely manner.

Midway Fire District – Claims Auditing (Albany County) Although required, the board did not thoroughly and deliberately audit all claims during the audit period. Auditors reviewed 71 claims (57 disbursements) totaling $542,613 and determined that 26 claims totaling $123,874 were not always adequately supported; included sales tax that should not have been paid, unnecessary charges including potentially inappropriate gift cards; or were not audited and approved by the entire board prior to payment. The lack of a proper audit of claims increased the risk that claims for inappropriate purposes could be paid, or that irregularities could go undetected and uncorrected.

Town of Morehouse – Transparency of Fiscal Activities (Hamilton County) The board did not conduct or provide for an annual audit of the supervisor’s financial records and reports for fiscal year 2024 in accordance with state law. In addition, although the supervisor prepared and filed the 2024 annual financial report (AFR) with the Comptroller’s Office, as required by state law, the supervisor did not provide the board with complete monthly financial reports.

Saranac Fire District – Board Oversight (Clinton County) The board did not adequately oversee the district’s financial operations related to maintaining accounting records, preparing bank reconciliations, submitting monthly and annual financial reports, performing annual audits, receiving state contract pricing for purchases and auditing and approving claims. As a result, the board’s ability to effectively manage the District’s financial condition, make sound financial decisions and ensure that the district only incurred necessary costs and paid for goods and services that were for appropriate district purposes were impaired. In addition, the district faced an increased risk of theft, waste and abuse of district resources.

Town of Steuben – Transparency of Fiscal Activities (Oneida County) The board did not conduct or provide for an annual audit of the supervisor’s financial records and reports for fiscal year 2024 in accordance with state law. In addition, the supervisor did not file the 2022 through 2024 AFRs with the Comptroller’s Office within 60 days after the fiscal years’ end, as required by law. Furthermore, the supervisor did not properly maintain financial information recorded in the accounting records, provide the board with all necessary monthly financial reports, and ensure town employees were paid in accordance with board-approved pay rates.

South Butler Fire District – Audit Follow-Up (Wayne County) An audit released in April 2021 determined that the board did not provide adequate oversight of the district’s financial operations and did not adopt or enforce key financial policies. In a follow-up, auditors found that of the audit report’s 14 recommendations, the board implemented five, partially implemented one and did not implement eight.

Quaker Street Fire District – Audit Follow-Up (Schenectady County) An audit released in December 2021 found that the board did not provide oversight to ensure purchases complied with the district’s procurement policy, claims were adequately reviewed, and financial reports were filed. Of the audit report’s seven recommendations, the board partially implemented one and did not implement six.

Caledonia Joint Fire District – Audit Follow-Up (Livingston County) An audit released in November 2024 determined that the board and district officials did not properly plan for long-term financial and capital needs. Of the audit report’s two recommendations, the board and district officials fully implemented one recommendation and partially implemented one recommendation.

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Press release: Immediately Contact: Mark Johnson, 518-474-4015 NEW YORK STATE COMPTROLLER DiNAPOLI, CalPERS CEO MARCIE FROST AND NYC COMPTROLLER MARK LEVINE RAISE ALARM ON REPORTS OF PROPOSED SPACEX IPO GOVERNANCE Warn That Reported Novel and Extreme Governance Structure Would be the Most Management-Favorable Ever Brought to U.S. Public Markets at this Scale New York State Comptroller Thomas P. DiNapoli, on behalf of the New York State Common Retirement Fund, along with California Public Employees’ Retirement System CEO Marcie Frost and New York City Comptroller Mark Levine, in a joint letter to SpaceX executives, raise objections to the reported proposed governance structures of SpaceX, which is preparing for its initial public offering, DiNapoli announced today. The investors hold combined assets under management exceeding $1 trillion for millions of working and retired public servants, including teachers, firefighters, police officers, nurses, and their beneficiaries [Emphasis supplied]. The letter follows press reports detailing a novel and extreme governance structure within SpaceX’s confidential draft registration statement. While the registration statement has not yet been made publicly available, as reported, the proposed structure would strip away fundamental investor protections by combining perpetual super-voting shares concentrated in Elon Musk, with a CEO removal provision that would insulate Musk with an effective veto over his own firing. The reported governance plan also would shield management from accountability through mandatory shareholder arbitration, controlled-company status, and restrictive Texas-based legal barriers to derivative litigation, while allowing one executive to maintain unprecedented control as CEO, CTO, and chair despite significant outside commitments. “The reported governance structure for SpaceX presents significant risks to long term-investors,” DiNapoli said. “As reported, these provisions include super voting shares for a select few, mandatory arbitration of shareholder claims, nearly insurmountable barriers to executive accountability, and limits on shareholder legal actions. This structure would leave shareholders with virtually no recourse over how the company conducts business. This is anathema to the transparency and legitimate board oversight required for a major publicly traded corporation. As SpaceX is poised to occupy a position of systemic importance in the public markets, its governance must at the bare minimum adhere to the baseline protections upon which long-term institutional capital depends.” “Sound governance is fundamental to a company’s long-term success, and we are concerned about the many glaring governance red flags including a lack of genuine checks and balances for Elon Musk as CEO,” Levine said. “The current proposed structure makes it nearly impossible to ensure strong safeguards are in place to preserve the company’s financial and reputational value, limits transparency, thwarts the opportunity for accountability, and overall dangerously undermines investor rights. If SpaceX is committed to starting off on the right foot, and earning the trust of potential shareholders, they will adopt governance practices that support their sustainable and long-term growth in earnest.” The letter urges SpaceX to revise its proposed structure before its final Form S-1 is filed. Specifically, the investors are seeking reforms, including: a one-share, one-vote structure or a time based sunset on super-voting shares; a majority-independent board with a separation of the chair and CEO roles; withdrawal of mandatory arbitration clauses for shareholder claims; and an independent-committee process to review related-party transactions across Musk’s affiliated entities. The investors requested a meeting with SpaceX management to discuss these reforms. “We are not merely seeking a seat at the table to discuss these concerns; we are seeking the fundamental rights that protect shareholders to be upheld by SpaceX management,” DiNapoli said. The full text of the letter is available at: https://www.osc.ny.gov/files/press/pdf/spacex-ipo-letter.pdf ### The New York State Common Retirement Fund is one of the largest public pension funds in the United States and has consistently been ranked as one of the best managed and best funded plans in the nation.

Selected Internet blog posts during the week ending May 15, 2026

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