Principles governing judicial review of administrative determinations pursuant to the substantial evidence standard

The Justice Center for the Protection of People with Special Needs [Justice] issued a report setting out an adverse "substantiated finding" involving Petitioner's interactions with an individual with special needs ["Service Recipient"]. Petitioner asked Justice to amend its report to "unsubstantiated" and that it be sealed. The original substantiated finding was sustained by the Justice Center's Administrative Appeals Unit and the matter was referred for a hearing before an Administrative Law Judge [ALJ].

The ALJ conducted two hearings and issued a recommended decision finding that Justice had established by a preponderance of the evidence that Petitioner was guilty of the alleged adverse conduct involving the Service Recipient. A final determination and order was issued adopting the ALJ's recommended decision. The decision denied Petitioner's request to amend and seal the report and directed that Petitioner be permanently placed on the agency's Vulnerable Person's Central Register staff exclusion list. Based on this determination, the New York State Office of Alcoholism and Substance Abuse Services [OASAS] revoked Petitioner's license.

Petitioner filed a CPLR Article 78 proceeding in Supreme Court contending the  determination was not supported by substantial evidence in the record because it was based upon controverted hearsay evidence. As a question of substantial evidence was raised by Petitioner, the proceeding was transferred to the Appellate Division.

Citing Matter of Haug v State Univ. of N.Y. at Potsdam, 32 NY3d 1044, the Appellate Division noted that the Court of Appeals had recently reviewed the principles governing judicial review of administrative determinations under the substantial evidence standard and stated that, as relevant in this action, the high court had emphasized that "the substantial evidence standard is a minimal standard[,] . . . demand[ing] only that a given inference is reasonable and plausible, not necessarily the most probable. . . . [Thus,] [w]here substantial evidence exists, the reviewing court may not substitute its judgment for that of the agency, even if the court would have decided the matter differently."

As to considering hearsay evidence in an administrative hearing, the Appellate Division said that "hearsay is admissible as competent evidence in an administrative proceeding, and if sufficiently relevant and probative may constitute substantial evidence even if contradicted by live testimony on credibility grounds" [see Matter of Watson v New York State Justice Ctr. for the Protection of People with Special Needs, 152 AD3d 1025].*

The Appellate Division opined that the hearsay allegations made by the Service Recipient were sufficiently reliable because they were corroborated by independent evidence and "was consistent with video recordings from the facility's security cameras," noting that the ALJ had also considered evidence regarding the credibility of the Service Recipient and Petitioner.**

With respect to Service Recipient's credibility, Petitioner had argued that the Service Recipient [1] had fabricated her allegations to avoid immediate discharge from the facility based on her previous misconduct and [2] submitted an affidavit that she had executed, recanting her initial allegations. 

The decision reports that the ALJ had disregarded the affidavit because it had been provided to Petitioner's counsel following an interview during which counsel was accompanied by an investigator and the Service Recipient was alone and unrepresented and, further, because the Service Recipient subsequently reconfirmed the truth of her initial allegations in an interview with Justice investigators.  

Explaining that courts "will not weigh conflicting testimony or second guess the credibility determinations of the administrative fact finder" [ see Matter of Stephen FF. v Johnson, 23 AD3d 977], the Appellate Division held that Justice's determination was supported by substantial evidence.

* At the hearing before the ALJ, Justice relied solely upon hearsay testimony to establish the allegations concerning Petitioner.

** The decision indicates that the record also contained evidence relevant to Petitioner's credibility, namely, "his admission that he had violated the facility's code of conduct by maintaining ongoing relationships with former clients after their discharge."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_01689.htm

PERB has exclusive jurisdiction to resolve a claim that a public employer committed an improper practice by discontinuing a past practice

In 2008 the City of Albany [Albany] began to implement changes to the health insurance plans it offered to Albany employees. In 2010, the Albany Police Officers Union, Local 2841 [Local 2841], the bargaining representative for police officers and and certain others working for Albany, filed an improper practice charge with the Public Employment Relations Board [PERB] alleging that Albany had changed the health insurance offered to certain retirees by unilaterally discontinuing the practice of reimbursing the retirees their Medicare Part B monthly premiums.

A PERB Administrative Law Judge dismissed the improper practice charge after a hearing. Local 2841 filed an administrative appeal with PERB but PERB sustained the Administrative Law Judge's determination, holding that Local 2841 did not establish that there was a binding past practice with respect to the health insurance benefit claimed by the retirees.

Local 2841 appealed PERB's determination and the Appellate Division, opining  that PERB's determination was not supported by substantial evidence, annulled the determination and granted Local 2841's petition [see Matter of Albany Police Officers Union, Local 2841, Law Enforcement Officers Union Dist. Council 82, AFSCME, AFL-CIO v New York Pub. Empl. Relations Bd., 149 AD3d 1236 [Decision 1]. When Local 2841 asked PERB to "fulfill its statutory duty" and provide a remedy following the Appellate Division's ruling in its favor, PERB declined, taking the position that it did not have an obligation to enter a remedial order because there had been no finding that there was a violation of the Taylor Law.

Local 2841 then commenced this, its second CPLR Article 78 proceeding,  concerning its allegation that Albany had violated Civil Service Law §209-a(1)(d) when it unilaterally discontinuing the practice of reimbursing retirees for their Medicare Part B monthly premiums and asked Supreme Court to compel PERB to issue an appropriate remedial order. PERB, however, contending that Local 2841 had "failed to state a cause of action," asked  Supreme Court to dismiss Local 2841's petition. Supreme Court granted PERB's motion to dismiss the petition and Local 2841 appealed.

Citing Matter of Chenango Forks Cent. Sch. Dist. v New York State Pub. Empl. Relations Bd., 21 NY3d 255, the Appellate Division observed that a binding past practice is established where "the practice was unequivocal and was continued uninterrupted for a period of time sufficient under the circumstances to create a reasonable expectation among the affected bargaining unit employees that the practice would continue" and PERB has exclusive jurisdiction to resolve a claim that a public employer committed an improper practice by discontinuing a past practice.

As the PERB's decision was made after a mandated hearing, the Appellate Division explained that its review of PERB's ruling in Decision 1 was limited to determining whether PERB's decision was "supported by substantial evidence," and it had found that it was not so supported. In contrast, in this action, said the Appellate Division, Local 2841 is seeking a writ in the nature of mandamus to compel PERB to impose a remedy based on the Appellate Division's holding in Decision 1.

While mandamus may be available to a party to compel the enforcement of a clear legal right where a public official has failed to perform a duty enjoined on the official by law, the Appellate Division said that "... while a mandamus is an appropriate remedy to enforce the performance of a ministerial duty, ... it will not be awarded to compel an act in respect to which the officer may exercise judgment or discretion."

The Appellate Division said that in Decision 1 it granted Local 2841's petition "only to the extent of finding that PERB's determination was not supported by substantial evidence." In contrast, the court stated that it had not found that Albany had violated Civil Service Law §209-a(1)(d) and thus Local 2841 has not established a clear right to mandamus relief directing PERB to issue a remedy.

In other words, the underlying issue -- did Albany engage in an improper practice -- has not been resolved. The Appellate Division then ruled that while Local 2841 had not demonstrated a clear legal right to a remedial order, Local 2841 and Albany "are entitled to a final and binding resolution of this issue" by PERB.

Accordingly, the Appellate Division remanded the matter to PERB and directed PERB to resolve "the 2010 improper practice charge in a manner that is not inconsistent with" the Appellate Division's determination in Decision 1.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_01699.htm

Courts may not interfere with an administrative tribunal's proper exercise of its discretion

In this appeal Petitioner challenged Supreme Court's dismissal of Plaintiff's Article 78 petition seeking to annul the determination of New York State Division of Human Rights (SDHR) that there was no probable cause to believe that Petitioner's employer, the Roswell Park Cancer Institute Corporation (Roswell), engaged in an unlawful discriminatory practice against her in its entirety.

The Appellate Division affirmed the Supreme Court's dismissal of the Article 78 action, rejecting Petitioner's contention that Supreme Court must determine whether substantial evidence supported SDHR's determination. The court explained that when SDHR renders a determination of no probable cause without holding a hearing, the appropriate standard of review is whether the probable cause determination was arbitrary and capricious or lacked a rational basis."

Citing Matter of Sullivan v New York State Div. of Human Rights, 160 AD3d 1395, the Appellate Division also rejected Petitioner's argument that SDHR was required to hold a hearing on her complaint before it could make a probable cause determination. SDHR, said the Appellate Division, "has the discretion to determine the method to be used in investigating a [complaint], and a hearing is not required in all cases," noting that the record indicated that Petitioner "had a full and fair opportunity to present her case and that [SDHR's] investigation was neither abbreviated nor one-sided." The fact that there was conflicting evidence before SDHR, opined the Appellate Division, did not create a material issue of fact that warranted a formal hearing"

In addition the Appellate Division indicated that:

1. probable cause exists only when, after giving full credence to the complainant's version of the events, there is some evidence of unlawful discrimination;

2. there must be a factual basis in the evidence sufficient to warrant a cautious person to believe that discrimination had been practiced; and

3. the court's standard of review is an "extremely deferential one.

In effect, courts cannot interfere with an administrative tribunal'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."

The bottom line: The Appellate Division found that Supreme Court properly concluded that SDHR's determination that there was no probable cause to believe that Roswell discriminated against Petitioner was not arbitrary or capricious and had a rational basis in the record.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_00780.htm

Claiming absolute privilege or qualified privilege as a defense in litigation involving alleged defamatory statements

The relevant facts in this action were not in dispute. Monroe County terminated Plaintiff from his position and on the same day the Monroe County Executive issued statements to the press that were published in local newspapers. Contending that three of the statements made by the County Executive were defamatory, Plaintiff sued Monroe County, among other named defendants [herein after collectively "Defendants"]. 

Defendants moved for summary judgment dismissing the Plaintiff's cause of action for alleged defamation, claiming an absolute or, in the alternative, a qualified privilege. Supreme Court denied Defendant's motion and the court's ruling was appealed. 

Citing Clark v McGee, 49 NY2d 613, the Appellate Division said that Defendants' statements to which Plaintiff objected "were absolutely privileged" noting that if an absolute privilege defense prevails it affords complete immunity from liability for alleged defamation to "an official [who] is a principal executive of State or local government ... with respect to statements made during the discharge of those responsibilities about matters which come within the ambit of those duties."

Courts typically apply a two-prong test in order to determine if an absolute privilege defense is available to the official based on [1] the status of the individual alleged to have utter the defamatory statement and [2] the subject matter of the statement in terms of it being consistent with the speaker's public duties. In some cases the forum in which the statement was uttered may be a consideration as well.

In this instance the Appellate Division conclude that absolute privilege applied because the speaker was the Monroe County Executive and her statements with respect to Plaintiff's termination concerned matters involving her official duties.*

In alternative, had a defense of absolute privilege not been available to Defendants, the Defendants might have advanced a claim that qualified privilege applied with respect to the County Executive's statements to the press as its defense.**

The qualified privilege defense, explained the Appellate Division "is available when a statement [not within the ambit of absolute privilege] is fairly made by a person in the discharge of some public or private duty, legal or moral, or in the conduct of his [or her] own affairs, in a matter where his [or her] interest is concerned."

Were a qualified privilege defense relied upon in this action, Defendant initially would have had to demonstrate that the County Executive made the  statements object to by Plaintiff  in her role as the Monroe County Executive in the course of discharging her duties and responsibility in order to keep the public informed regarding a sensitive issue that had obtained extensive media attention.

Once this was done, the burden of going forward would have been shifted to Plaintiff, who would have then been required to demonstrate a triable issue of fact existed as to whether the statements of the County Executive were motivated solely by malice.

Another area that may result in litigation is one in which Employee A alleges that he or she was defamed in an internal communications between administrators, or between another employee, Employee B, and an administrator concerning Employee A. 

Murphy v Herfort, 428 NY2d 117, is an example of litigation resulting from statements contained in communications between administrators; Missek-Falkoff v Keller, 153 AD2d 841, is an example of a case where Employee 1 sued another employee, Employee 2, because of the contents of a memorandum from Employee 2 to a superior concerning a “problem” with Employee 1.

As alternatives to claiming absolute immunity or qualified immunity, a public officer or employee involved in a judicial or quasi-judicial proceeding or in an administrative hearing may advance a claim of use immunity or transaction immunity as a defense, while from time to time a governmental entity may cite the Doctrine of Governmental Function Immunity*** as a defense, founded on the principle of the separation of powers and which is intended to ensure that public servants are free to exercise their decision-making authority [see Marbury v Madison, 5 U.S. 137;  Valdez v City of New York, 18 NY3d 69]. 

* The court further opined that because the investigation and the underlying actions of Plaintiff became a matter of public attention and controversy, the form of communication, e.g., statements to the press, was warranted, citing Kilcoin v Wolansky, 75 AD2d 1, affd 52 NY2d 995.

** In Tulloch v Coughlin, 50 F.3d 114, the US Circuit Court of Appeals, Second Circuit, considered the differences between “absolute immunity” and “qualified immunity.”

*** Although New York State has waived Sovereign Immunity as a defense on behalf of itself and its municipal subdivisions, the common-law doctrine of governmental immunity continues to shield public entities from liability for discretionary actions taken during the performance of governmental functions. 

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_00747.htm

Determining the compensation to be included when calculating the final average salary of a New York City Employees Retirement System member

When the New York City Employees Retirement Systems [NYCERS] failed to included the compensation Plaintiff had received from the City University of New York [CUNY] in addition to his compensation from the New York City Housing Authority [Authority] in the calculation of his final average salary for the purposes of determining the pension portion of his  retirement allowance, Plaintiff file a CPLR Article 78 petition naming NYCERS, the City of New York Department of Citywide Administrative Services, and CUNY as respondents [hereinafter jointly Defendants]. 

Plaintiff contended that NYCERS should have included his CUNY compensation in the determination of his final average salary. Supreme Court judgment granted Plaintiff's petition and directed NYCERS to include the salary the Plaintiff received from the CUNY in the calculation of his final average salary. Defendants appealed and the Appellate Division reversed the lower court's ruling, on the law, confirmed NYCERS' determination with respect to its calculation of Petitioner's final average salary and dismissed the proceeding "on the merits."

The Appellate Division's decision indicated that (1) Plaintiff had been employed as a full-time employee by the Authority; (2) as a part-time adjunct lecturer by CUNY; (3) had  joined the NYCERS on January 5, 1981; and (4) had never been a member of the Teachers' Retirement System of the City of New York [NYCTRS].

When Plaintiff filed his retirement application with NYCERS, NYCERS determined his "final average salary" only considering the compensation he received as a result of his employment with the Authority. When asked, NYCERS informed Plaintiff that the title of adjunct lecturer was a "non-eligible NYCERS title" and thus  his earnings while employed with CUNY were not included in the final average salary computation upon which the pension portion of his retirement allowance was based.

The Appellate Division held that contrary to the determination of the Supreme Court, Plaintiff employment with CUNY was not "city-service," as defined by Administrative Code §13-101(3).* The court explained that Supreme Court relied upon language contained in Administrative Code §13-563 which, in relevant part, "extended membership in NYCTRS to all lecturers employed by CUNY who serve on a "per hour, per diem, per monthly or per semester basis, . . . provided however that such lecturers are not members of any other retirement system supported in whole or in part by the city."

The Appellate Division opined that because the Plaintiff had elected to be a member of NYCERS, he was not eligible for membership in NYCTRS notwithstanding Plaintiff's employment with both the Authority and CUNY, concluding that Plaintiff was eligible for membership in either NYCERS or NYCTRS, but not both.

In the words of the Appellate Division, Supreme Court's "interpretation had the effect of rewriting the definition of "city-service" to include any city employee who is both NYCERS and NYCTRS eligible, regardless of which retirement system they choose, and created a new, unpermitted exception to the dual employment provisions in the Administrative Code."

As the maxim "expressio unius est exclusio alterius"** is typically followed by courts when determining the legislative intent or application of a statute, the Appellate Division concluded that "where a law expressly describes a particular act, thing or person to which it shall apply, an irrefutable inference must be drawn that what is omitted or not included was intended to be omitted or excluded."

The bottom line: the Appellate Division ruled that as "the determination that Plaintiff is not entitled to inclusion of his CUNY earnings in the calculation of his final average salary was not arbitrary or capricious or affected by an error of law, the Supreme Court should have denied the petition and dismissed the proceeding on the merits."

* The Appellate Division observed that because Plaintiff was eligible for membership in NYCTRS, his employment with CUNY was not "city-service" as defined by Administrative Code §13-101(3).

**  A "Law Latin" term meaning when one or more things of a class are expressly mentioned in a statute all others of the same class are excluded.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_01593.htm