December 20, 2010

Conflict of interest

Conflict of interest
Peterson v Corbin, 275 AD2d 35*

Gregory P. Peterson, the President of the Nassau OTB, sued Roger H. Corbin in an effort to prevent Corbin, a member of the Nassau County legislature, from voting on any appointment to the board of directors of the Nassau OTB.

The reason advanced by Peterson in support of his petition: Corbin was employed as a branch manager for the New York City Off-Track Betting Corporation (NYC-OTB) and was a member of Local 858 of the International Brotherhood of Teamsters, pointing out that Local 858 represented all of the employees of the Nassau OTB and the branch managers of NYC-OTB. This employment and union membership, alleged Peterson, constituted a conflict of interest with respect to Corbin’s performing his duties as a Nassau County Legislator.

A Supreme Court judge issued a preliminary injunction preventing Corbin from voting on OTB appointments based on a finding of the existence of an appearance of impropriety. Corbin appealed. The Appellate Division, Second Department, reversed the lower court’s determination.

Peterson, said the Appellate Division, was required to demonstrate a likelihood of success on the merits by making a prima facie showing, at least by affidavits, if not by testimony, of conflicts of interest. This, said the court, he was unable to do.

According to the Appellate Division, Corbin’s employment as a NYC-OTB branch manager and his position as a member of the Nassau County Legislature pose no conflict since there was nothing in the record indicating the existence of any dealings between NYC-OTB and the Nassau County Legislature.

As to Corbin’s membership in Local 858, the court pointed out that according to the record, he is not an officer or member of the negotiating team of that union.

The court noted that while Local 858 also represents the Nassau OTB employees, there is no connection between the contracts reached by Local 858 and the two OTBs and the record shows that there are two negotiating units within Local 858; one dealing with NYC-OTB branch managers and the other dealing with all the Nassau OTB employees.

The Appellate Division also commented that “even if we assume, without evidence, that Peterson will not be reappointed to the board of directors of the Nassau OTB as a result of Corbin’s decisive vote, this could not be considered irreparable harm [and] Peterson does not have a protected property interest in his position as a director of the Nassau OTB.”

Balancing Peterson’s failure to demonstrate any potential harm in the absence of a preliminary injunction against the right of Corbin’s constituents to be represented in the vote for OTB directors, the court concluded that the preliminary injunction had to be vacated.

* The Court of Appeals dismissed the appeal on its own motion after concluding that the Appellate Division’s order denying the preliminary injunction did not necessarily affect the final judgment of Supreme Court, as required by CPLR 5601 (d), [95 NY2d 919].

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