Court of Appeals holds that a “residency policy” requiring municipal workers to be domiciled within the geographical boundaries of the jurisdiction serves a "legitimate purpose"

Court of Appeals holds that a “residency policy” requiring municipal workers to be domiciled within the geographical boundaries of the jurisdiction serves a "legitimate purpose"

Matter of Beck-Nichols, Adrian, and Luchey v Bianco, 2013 NY Slip Op 01015, Court of Appeals

These three appeals stem from a residency policy that required employees of the School District of the City of Niagara Falls, New York (the District) hired or promoted after the policy's effective date, March 1, 1994, to reside in the City of Niagara Falls (Niagara Falls or the City), and maintain residency there during their employment.

The policy's implementing regulations define "residency" as "an individual's actual principal domicile* at which he or she maintains usual personal and household effects."

Essentially all three individual had signed affirmations signifying their understanding that they were required to become domiciled with in the City  in accordance with the District’s residency policy. Subsequently the District's School Board, after an investigation, concluded that three employees were not domiciled in Niagara Falls and terminated their respective employments with the District.

Supreme Court, in an Article 78 action involving two of the three employees,** characterized the District’s policy's definition of residency as creating a "vague and ambiguous" standard which, coupled with the Superintendent's failure to develop adequate procedures and guidelines, "resulted in varied and subjective interpretations leading to disparate results." The court held that the residency requirement was unenforceable, and that any termination of the two individuals involved in this phase of the litigation based on it was therefore arbitrary and capricious. Supreme Court directed the reinstatement of the two individuals with full back pay and benefits.

Different panels of the Appellate Division considered these appeals. One panel reversed the Supreme Court’s judgment as to one of the individuals (92 AD3d 1272), holding that the District established that the individual was not domiciled in Niagara Falls, and therefore the Board's determination was not arbitrary and capricious. The Court of Appeals affirm this ruling.

A second panel sustained the Supreme Court’s ruling with respect to the second individual without opinion (92 AD3d 1276) which ruling the Court of Appeals reversed.

The Court of Appeals explained that a residency policy for municipal workers serves "the legitimate purpose of encouraging city employees to maintain a commitment and involvement with the government which employs them by living within the city [citations omitted]."

Addressing the implementing regulations, the court noted that the regulation define "residency" as "an individual's actual principal domicile at which he or she maintains usual personal and household effects." This definition, said the court, may be criticized for redundancy or surplusage, but not ambiguity. The word "domicile" alone is enough to convey the sense that the Board mandates that District employees live in Niagara Falls "with intent to make it a fixed and permanent abode."

As to “administrative due process” issues advanced by the individuals, the Court of Appeals pointed out that the regulations “provide for notifying employees of the residency policy upon initial appointment and promotion; give employees six months after appointment to come into compliance, and allow the Board, in its discretion, to extend this grace period for another six months; provide for a "seven-day letter" to afford an employee the opportunity to respond to allegations of non-compliance; include a hardship waiver; and exempt non-administrative employees hired prior to the policy's effective date, subject to certain conditions.”

The regulations, said the court, “also include detailed forms to carry out the policy. These forms, in one way or another, call for employees to acknowledge that they have read, understand and agree to fulfill their responsibilities under the policy.”

As to claims advanced by two of the individual’s contending that they were entitled to pre-termination hearings in the nature of a disciplinary proceeding as a condition precedent to their termination, the Court of Appeals indicated that it had previously held that a residency requirement defines eligibility for employment, and so is "unrelated to job performance, misconduct or competency." Thus said the court, the individuals were not entitled to a pre-termination hearing such as set out Education Law  §§2509(2), 3020 or 3020-a, which deal with teacher discipline, explaining that in this instance “due process mandates only notice and some opportunity to respond.”

Finally, the court addressed the proper standard for judicial review in these cases, concluding that the standard is whether the Board's determination was arbitrary and capricious or an abuse of discretion. 

Conceding that this standard is ‘an extremely deferential one,” the Court of Appeals said that "The courts cannot interfere [with an administrative body's exercise of discretion] unless there is no rational basis for [its] exercise . . . or the action complained of is arbitrary and capricious, [a test which] chiefly relates to whether a particular action should have been taken or is justified . . . and whether the administrative action is without foundation in fact," citing Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222," [emphasis supplied by the court].

The bottom line: the Court of Appeals held that in Beck-Nichols the judgment of the Appellate Division should be reversed, with costs, and the petition dismissed; in Adrian, the order of the Appellate Division should be affirmed, with costs; and in Luchey, the order of the Appellate Division should be reversed, with costs, and the matter remitted to Supreme Court for further proceedings in accordance with this opinion.

* In Longwood Cent. School Dist. v Springs Union Free School District, 1 NY3d 385, a case involving which of two school districts must bear the educational costs for children who, immediately before their placement in foster care, lived in a homeless shelter with their mother, the Court of Appeals explained: "Within the general scheme of Education Law §3202, this Court and the Department of Education have consistently interpreted residence as akin to domicile. Domicile requires bodily presence in a place with an intent to make it a fixed and permanent home (see Matter of Newcomb, 192 NY 238, 250 [1908])."

** Supreme Court transferred the petition filed by the third individual, Luchey, to the Appellate Division, which ruled in favor of the former employee. The Court of Appeals reversed this determination by the Appellate Division.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2013/2013_01015.htm

Court of Appeals holds that a “residency policy” requiring municipal workers to be domiciled within the geographical boundaries of the jurisdiction serves a "legitimate purpose"

Court of Appeals holds that a “residency policy” requiring municipal workers to be domiciled within the geographical boundaries of the jurisdiction serves a "legitimate purpose"

Matter of Beck-Nichols, Adrian, and Luchey v Bianco, 2013 NY Slip Op 01015, Court of Appeals

These three appeals stem from a residency policy that required employees of the School District of the City of Niagara Falls, New York (the District) hired or promoted after the policy's effective date, March 1, 1994, to reside in the City of Niagara Falls (Niagara Falls or the City), and maintain residency there during their employment.

The policy's implementing regulations define "residency" as "an individual's actual principal domicile* at which he or she maintains usual personal and household effects."

Essentially all three individual had signed affirmations signifying their understanding that they were required to become domiciled with in the City  in accordance with the District’s residency policy. Subsequently the District's School Board, after an investigation, concluded that three employees were not domiciled in Niagara Falls and terminated their respective employments with the District.

Supreme Court, in an Article 78 action involving two of the three employees,** characterized the District’s policy's definition of residency as creating a "vague and ambiguous" standard which, coupled with the Superintendent's failure to develop adequate procedures and guidelines, "resulted in varied and subjective interpretations leading to disparate results." The court held that the residency requirement was unenforceable, and that any termination of the two individuals involved in this phase of the litigation based on it was therefore arbitrary and capricious. Supreme Court directed the reinstatement of the two individuals with full back pay and benefits.

Different panels of the Appellate Division considered these appeals. One panel reversed the Supreme Court’s judgment as to one of the individuals (92 AD3d 1272), holding that the District established that the individual was not domiciled in Niagara Falls, and therefore the Board's determination was not arbitrary and capricious. The Court of Appeals affirm this ruling.

A second panel sustained the Supreme Court’s ruling with respect to the second individual without opinion (92 AD3d 1276) which ruling the Court of Appeals reversed.

The Court of Appeals explained that a residency policy for municipal workers serves "the legitimate purpose of encouraging city employees to maintain a commitment and involvement with the government which employs them by living within the city [citations omitted]."

Addressing the implementing regulations, the court noted that the regulation define "residency" as "an individual's actual principal domicile at which he or she maintains usual personal and household effects." This definition, said the court, may be criticized for redundancy or surplusage, but not ambiguity. The word "domicile" alone is enough to convey the sense that the Board mandates that District employees live in Niagara Falls "with intent to make it a fixed and permanent abode."

As to “administrative due process” issues advanced by the individuals, the Court of Appeals pointed out that the regulations “provide for notifying employees of the residency policy upon initial appointment and promotion; give employees six months after appointment to come into compliance, and allow the Board, in its discretion, to extend this grace period for another six months; provide for a "seven-day letter" to afford an employee the opportunity to respond to allegations of non-compliance; include a hardship waiver; and exempt non-administrative employees hired prior to the policy's effective date, subject to certain conditions.”

The regulations, said the court, “also include detailed forms to carry out the policy. These forms, in one way or another, call for employees to acknowledge that they have read, understand and agree to fulfill their responsibilities under the policy.”

As to claims advanced by two of the individual’s contending that they were entitled to pre-termination hearings in the nature of a disciplinary proceeding as a condition precedent to their termination, the Court of Appeals indicated that it had previously held that a residency requirement defines eligibility for employment, and so is "unrelated to job performance, misconduct or competency." Thus said the court, the individuals were not entitled to a pre-termination hearing such as set out Education Law  §§2509(2), 3020 or 3020-a, which deal with teacher discipline, explaining that in this instance “due process mandates only notice and some opportunity to respond.”

Finally, the court addressed the proper standard for judicial review in these cases, concluding that the standard is whether the Board's determination was arbitrary and capricious or an abuse of discretion. 

Conceding that this standard is ‘an extremely deferential one,” the Court of Appeals said that "The courts cannot interfere [with an administrative body's exercise of discretion] unless there is no rational basis for [its] exercise . . . or the action complained of is arbitrary and capricious, [a test which] chiefly relates to whether a particular action should have been taken or is justified . . . and whether the administrative action is without foundation in fact," citing Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222," [emphasis supplied by the court].

The bottom line: the Court of Appeals held that in Beck-Nichols the judgment of the Appellate Division should be reversed, with costs, and the petition dismissed; in Adrian, the order of the Appellate Division should be affirmed, with costs; and in Luchey, the order of the Appellate Division should be reversed, with costs, and the matter remitted to Supreme Court for further proceedings in accordance with this opinion.

* In Longwood Cent. School Dist. v Springs Union Free School District, 1 NY3d 385, a case involving which of two school districts must bear the educational costs for children who, immediately before their placement in foster care, lived in a homeless shelter with their mother, the Court of Appeals explained: "Within the general scheme of Education Law §3202, this Court and the Department of Education have consistently interpreted residence as akin to domicile. Domicile requires bodily presence in a place with an intent to make it a fixed and permanent home (see Matter of Newcomb, 192 NY 238, 250 [1908])."

** Supreme Court transferred the petition filed by the third individual, Luchey, to the Appellate Division, which ruled in favor of the former employee. The Court of Appeals reversed this determination by the Appellate Division.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2013/2013_01015.htm

Public entities may have monies being held in the State Comptroller's Abandoned Property Fund

Public entities may have monies being held in the State Comptroller's Abandoned Property Fund

The State’s Abandoned Property Law requires banks, insurance companies, utilities, and other businesses to turn dormant savings accounts, unclaimed insurance and stock dividends, and other inactive holdings over to the State. If there has been no activity in the account for a set period of time, usually between two and five years, the money or property is considered unclaimed or abandoned. Although Section 1402 of the Abandoned Property Law has a $20 threshold for such listing, the Comptroller uses a "$50 threshold” for the listings on his Internet website.

In these times of financial difficulties, every penny counts -- so below is a sample listing of various public entities currently listed as having monies being held by the State Comptroller in the Abandoned Property Fund and which may be claimed by the rightful owner. The Comptroller's dedicated web site for making such searches is at: http://www.osc.state.ny.us/ouf/index.htm    

How much money is being held in the Fund? Twelve Billion Dollars, give or take a few million.

A search of the Comptroller web site at for “nys dep” resulted in 15 matches, included those listed below. 

	Name	Address	Reported By
	NYS DEPARTMENT OF STATE CERTIFICATION UNIT	123 WILLIAM ST NEW YORK NY 10038	ROPES & GRAY LLP
	NYS DEPARTMENT OF STATE DIVIS	99 WASHINGTON AVENUE, 6TH FLR ALBANY NY 12231	STATE FARM FIRE & CASUALTY CO
	NYS DEPARTMENT OF TAXATION AND FINANCE	P O BOX 4127 BINGHAMTON NY 13902	NATIONAL FINANCIAL SERVICES LLC

Other public employers and employee organizations are listed by the Comptroller as having monies being held in the Abandoned Property Fund as well, although it may take some detective work as the organization’s “official name” may not be the one being used by the depositing organization. 

For example, a search for “County of” resulted in 129 matches such as:

	COUNTY OF COLUMBIA	PO BOX 458 HUDSON NY 12534	EMPIRE BLUE CROSS & BLUE SHIELD
	COUNTY OF CORTLAND	60 CENTRAL AVE PO BOX 5590 NY 13045	NATIONWIDE RETIREMENT SOLUTIONS
	COUNTY OF DUCHESS DE	60 MARKET ST POUGHKEEPSIE NY 12601	TELECHECK SERVICES INC

A search by county name is also possible, such as the following results using the search term “Yates Co”-

	YATES CO DEP OF SOCI	110 COURT ST PENN YAN NY 14527	SUBURBAN PROPANE PARTNERS LP
	YATES CO DEPT SOCIAL	110 COURT STREET PENN YAN NY 14527	AMERIGAS PROPANE LP
	YATES CO FIRE DEPT	227 E MAIN ST PENN YAN NY 14527	PEARSON EDUCATION INC
	YATES CO MENTAL HEALTH CLINIC	431 LIBERTY ST PENN YAN NY 14527	TRAVELERS INDEMNITY CO
	YATES CO SOIL WATECONSERVATION	110 COURT STREET PENN YAN NY 14527	MERCHANTS MUTUAL INSURANCE CO

A search for 'BOCES' resulted in 26 matches, some of which are listed below.

	BOCES	SUITE 102 900 WATERVLIET SHAKER RD ALBANY NY 12205	VERIZON WIRELESS
	BOCES	ATTN VAL WARD 435 GLENWOOD RD BINGHAMTON NY 13905	NEW YORK TELEPHONE CO
	BOCES	1126 BALDHILL RD HORNELL NY 14843	COCA COLA ENTERPRISES INC
	BOCES	1086 EAST MAIN STREET SCHRUB OAK NY 10588	AT&T CORP
	BOCES	CAYUGA-ONONDAGA BOARD OF COOPE P O BOX 4 51 SYRACUSE NY 13208	TIME WARNER ENTERTAINMENT CO L P

while a search using “school district” resulted in the following “hits:”

	SCHOOL DISTRICT GREE	10 GRAY AVE GREENWICH NY 12834	SHAKLEE U S LLC
	SCHOOL DISTRICT NO 3 5 LANGLEY	BUSINESS OFFICE 4875 222ND STREET	EDUCATIONAL TESTING SERVICE
	SCHOOL DISTRICT NORT	5355 W TAFT RD N SYRACUSE NY	NEW YORK TELEPHONE CO
	SCHOOL DISTRICT NUMBER 42	BUSINESS OFFICE 22225 BROWN AVENUE	EDUCATIONAL TESTING SERVICE

and there were four matches for “union free school” –

	UNION FREE SCHOOL DI	480 CLAY PITTS RD EAST NORTHPORT NY 11731	HEWLETT PACKARD CO
	UNION FREE SCHOOL DI	TOWN OF GREENBURGH BOARD OF ED 360 BROAD WAY HASTINGS NY 10706	PRUDENTIAL INSURANCE CO OF AMERICA
	UNION FREE SCHOOL DIST 1	399 KNOLLWOOD RD APT 103 WHITE PLAINS NY 10607	AETNA LIFE INSURANCE & ANNUITY CO
	UNION FREE SCHOOL DISTRICT 4 BOARD EDUCATION	27 FARRAGUT AVE HASTINGS ON HUDSON NY 10706	CHEMTURA CORP

Searching  for “Town of” produced 366 matches, including:

	TOWN OF ALDEN	2240 SOUTHWESTERN BLVD WEST SENECA NY 14224	CITIBANK NEW YORK STATE
	TOWN OF ANDES HIGHWAY DEP	PO BOX 246 ANDES NY 13731	HSBC FINANCE CORP
	TOWN OF ARIETA	PO BOX 37 PISECO NY 12139	CDW LLC
	TOWN OF ASHFORD	9377 ROUTE 240 WEST VALLEY NY 14171	EDP RENEWABLES NORTH AMERICA L

while a search for “Town clerk” produced 2 matches:

	TOWN CLERK - WATER &SEWER USUA	TOWN OF GREENPORT HUDSON NY 12534	NEW YORK TELEPHONE
	TOWN CLERK GREENBURGH	PO BOX 810 STONE RIDGE NY 12484	CITIBANK NA NATIONAL COMPLIANCE GRP

A search using the term “village of” resulted in 155 matches including:

	VILLAGE OF	JOE MARASCO 27 WEST AVE SPENCERPORT NY 14559	EXCELLUS HEALTH PLAN INC
	VILLAGE OF ADDISON	PO BOX B ADDISON NY 14801	TIME WARNER ENTERTAINMENT CO L P
	VILLAGE OF ALFRED	WATER DEPARTMENT 7 WEST UNIVERSITY STREE T ALFRED NY 14802	ALFRED UNIVERSITY
	VILLAGE OF ALTAMONT	PO BOX 643 ALTAMONT NY 12009	GALLS LLC

Public employee organizationshaving funds held by the Comptroller include:

	CSEA LOCAL 1000 AFSCM	143 WASHINGTON AVE CAPITON ST ALBANY NY 12224	STATE OF CALIFORNIA
	CSEA LOCAL 407	10 RAILROAD PL CAPITAL DISTRICT DSO SARATOGA SPRINGS NY 12866	MARRIOTT INTERNATIONAL INC
	CSEA LOCAL 431	61 LAKE ST TUPPER LAKE NY 12986	COCA COLA REFRESHMENTS USA INC
	CSEA LOCAL 667	PO BOX 903 TROY NY 12181	MARRIOTT INTERNATIONAL INC
	CSEA LOCAL 8	PO BOX 480 CARMEL NY 10512	VERIZON NEW YORK INC

and

	POLICE BENEVOLENT AS	112 STATE ST STE 1212 ALBANY NY 12207	UNITED STATES LIFE INSURANCE CO
	POLICE BENEVOLENT ASSN INC	NYC TRANSIT POLICE DEPARTMENT CO MR RICH ARD A DIENST NEW YORK NY 10279	CITIBANK N A
	POLICE BENEVOLENT ASSOC	CITY OF WHITE PLAINS PO BOX 68 WHITE PLAINS NY 10603	SAM ASH MUSIC CORPORATION
	POLICE BENEVOLENT ASSOC TOWN	BOX 89 ARRONK NY 10504	BANKERS TRUST CO

An individual seeking certain records disclosed by a party in another litigation must show that such records are “in controversy” in his or her action

An individual seeking certain records disclosed by a party in another litigation must show that such records are “in controversy” in his or her action

A teacher [Teacher] at a State correctional facility alleged that she had been subjected to unlawful discrimination based upon sex, age and disability and then subjected to retaliation for complaining about such alleged discrimination by her supervisor.

Supreme Court denied Teacher’s motion seeking the production of her supervisor’s medical records, which decision was sustained by the Appellate Division.

The Appellate Division explained that “[e]ven assuming, arguendo, that [the supervisor] waived the physician-patient privilege with respect to those records by disclosing them in an action commenced by [her] in federal court, we conclude that [Teacher] failed to meet her initial burden of making an evidentiary showing that [the supervisor’s] medical condition ‘in controversy’ in this action,” citing CPLR §3121[a].

The Appellate Division commented that “[t]he fact that [the supervisor] affirmatively placed her medical condition in controversy in the related action she commenced in federal court does not relieve [Teacher] of her initial burden herein.” 

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2013/2013_00853.htm

An arbitration award that is rational and which neither violates strong public policy nor exceeds the power of the arbitrator may not be vacated by the courts

An arbitration award that is rational and which neither violates strong public policy nor exceeds the power of the arbitrator may not be vacated by the courts
New York Finger Lakes Region Police Officers Local 195 of Council 82, AFSCME, AFL-CIO (City of Auburn), 2013 NY Slip Op 00844, Appellate Division, Fourth Department

The Finger Lakes Region Police Officers Local 195 appealed Supreme Court's rejection of its petition to vacate an arbitration award in which the arbitrator had determined that the City of Auburn had not violated the terms of the relevant collective bargaining agreement (CBA) when it terminated the employment of one of the members of the Local.

The Appellate Division sustained the lower court’s ruling, explaining that "[a]n arbitration award may be vacated if it is irrational, violates a strong public policy, or clearly exceeds a specifically enumerated limitation on the arbitrator's power*" Here, and notwithstanding the Local’s arguments to the contrary, the Appellate Division concluded that the arbitrator's interpretation of the CBA was not irrational, "nor did the arbitrator alter the terms of the CBA based on his interpretation of its terms so as to exceed his authority."

Citing Communication Workers of Am., Local 1170 v Town of Greece, 85 AD3d 1668, leave to appeal denied 18 NY3d 802, the Appellate Division noted that an arbitrator is required to interpret and apply the terms of a CBA and while another entity could have applied a different construction to the relevant provision of the agreement, in this instance “it cannot be stated that the arbitrator gave a completely irrational construction to the provision in dispute and, in effect, exceeded [his] authority by making a new contract for the parties."

* §7511 of the Civil Practice Law and Rules sets out a number additional reasons that permit a court to set aside an arbitrator’s award such as a finding of corruption, fraud or misconduct in procuring the award; the partiality of an arbitrator appointed as a neutral,[except where the award was by confession], or the failure to follow procedures set out in Article 75 unless the party seeking to vacate the award on such grounds continued with the arbitration with notice of the defect[s] without objection.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2013/2013_00844.htm