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January 29, 2020

An Article 78 petitioner is not aggrieved by an administrative determination made following petitioner's default and may not seek to review such a determination

Supreme Court dismissed the Petitioner's CPLR Article 78 action seeking a review of a determination by the Commissioner of Education [Commissioner], alleging that that the penalties imposed by the Commissioner "were excessive and improper.

The Commissioner had affirmed the decision of a hearing officer that Petitioner had operated an English as a second language school without, among other things, [a] being certified; [b] employing at least one private school agent, [c] paying required fees; [d] submitting required licensure and certification paperwork; and [e] recommended certain civil penalties upon, and restitution by, Petitioner. Supreme Court dismissed the action, finding that Petitioner's default precluded review of the order* and Petitioner appealed.

The Appellate Division, affirmed the lower court's ruling, observing that Petitioner had not answered or otherwise contested the Department's charges and thereafter failed to appear at a hearing before the designated Hearing Officer and, as a result of Petitioner's failure to appear, the Hearing Officer deemed the allegations against Petitioner to be admitted and recommended the imposition of fines totaling $398,000.

The court also noted that Petitioner did not deny that it failed to answer or otherwise appear following service upon it of both the notice of charges and the notice of hearing date nor object to the Hearing Officer's report or otherwise seek to vacate its default prior to the Commissioner's issuance of the order imposing the subject fines.

Citing Matter of Matsos Contr. Corp. v New York State Dept. of Labor, 80 AD3d 924 and other court rulings, the Appellate Division observed that it is well settled that "a petitioner is not aggrieved by an administrative determination made on its default and may not seek to review such a determination."

Addressing a procedural matter, the court noted that "the fact that a determination is final for the purpose of its present execution does not mean it is final for judicial review purposes." In such situations the proper procedure for a petitioner seeking judicial review of the merits underlying an administrative default "is to apply to the agency to vacate the default by demonstrating a reasonable excuse for the default and the existence of a meritorious claim and, if unsuccessful, seek[ing] court review of the agency's denial of that application."

Considering this point, the Appellate Division rejected Petitioner's claim that "(1) Education Law §5003 expressly relieves petitioner from having to submit an application seeking to vacate its administrative default before seeking judicial review of the underlying merits or (2) that the absence of a statutory and/or regulatory procedural mechanism for seeking vacatur of an administrative default precludes the agency from otherwise entertaining such an application."

Rather, noted the Appellate Division, during oral argument counsel for [the Commissioner] conceded that the "Commissioner would readily entertain an application" by Petitioner seeking to vacate the subject default. Thus, said the court, as Petitioner has, to date, not filed an application seeking to vacate its administrative default, "we find that its petition was properly dismissed."

* Petitioner had not answered or otherwise contested the Department's charges and thereafter failed to appear at a hearing before the designated Hearing Officer.

N.B.  In contrast, with respect to disciplinary action initiated by an appointing authority charging an employee with misconduct or incompetence pursuant to law or a provision set out in a collective bargaining agreement, the general rule in such situations is that if the employee fails to appear at the disciplinary hearing, the charging party may elect to proceed but must actually hold a “hearing in absentia” and prove its allegations rather then merely impose a penalty on the individual on the theory that the employee’s failure to appear at the hearing as scheduled is, in effect, a concession of guilt.

The decision is posted on the Internet at:

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