An administrative regulation, or an amendment to such regulation, will be sustained if not arbitrary or irrational

The Independent Insurance Agents and Brokers of New York, Inc., et al., [Petitioners], challenged the validity of the recently amended Insurance Regulation 187 (11 NYCRR 224), which provides protections to consumers engaging in life insurance and annuity transactions. 

The Court of Appeals held that "[b]ecause the Department of Financial Services [DFS] appropriately exercised its authority to create a carefully considered and clear regulation, it found no basis to invalidate the regulation." 

The court explained that: 

1. An administrative regulation will be upheld only if it has a rational basis, and is not unreasonable, arbitrary or capricious, citing New York StateAssn. of Counties v Axelrod, 78 NY2d at 166. 

2. "If a regulation is to be nullified, the challenger must establish that it is so lacking in reason for its promulgation that it is essentially arbitrary", citing Kuppersmith v Dowling, 93 NY2d 90.

3. "So long as the regulation is 'genuine[ly] reasonable and rational' it should be upheld—courts should not scrutinize the 'policy considerations underlying the' regulation”, citing New York StateAssn. of Counties v Axelrod, 78 NY2d 158.

The Court of Appeals then opined "The goal of the amendment is straightforward and supported by the administrative record, and the amendment is plainly tailored to achieve those objectives [and] DFS reasonably concluded that the 'best interest' framework was needed to protect consumers, and [Petitioners] cannot show that the amended regulation is 'essentially arbitrary'".

In the words of the court, "[e]ach of [Petitioners] arguments for invalidating the regulation is unavailing. Petitioners have fallen woefully short of their burden to sustain a facial due process challenge on vagueness grounds, and the extensive administrative record supporting the amended regulation refutes their alternative challenges."

Click on the URL shown below to access the text of the decision of the Court of Appeals.

 https://www.nycourts.gov/reporter/3dseries/2022/2022_05917.htm

 

Education Law §3012-c evaluation procedures apply only to classroom teachers and building principals

A New York City Department of Education [Employer] "per session football coach" [Coach] appealed the Employer's "unsatisfactory performance rating" for his services during the 2018 football season. 

Coach initiated a CPLR Article 78 action seeking a court order directing Employer to expunge the U-rating and reinstate "his ability to do per session [coaching] work  ...." contending that Employer "violated procedure by failing to conduct observations of his performance and provide him with notice of any of the misconduct."

The Appellate Division rejected Coach's argument, explaining that "the evaluation procedures set forth in Education Law §3012-c [Annual professional performance review of classroom teachers and building principals] expressly applies only to "classroom teachers and building principals and [Coach] has not demonstrated that they apply to per session coaches."

The Appellate Division then opined that the Employer's U-rating was not arbitrary and capricious and was supported by a rational basis by the evidence in the record. Such evidence said the court, indicated, among other things, Coach's "arrest for driving while intoxicated, continued alcohol usage on school premises, covering up of misconduct by a football player, and lack of leadership," which led to decline of the football program.

Click HEREto access the Appellate Division's decision in this action.

 

Determining "standing" to proceed with a CPLR Article 78 action

In 2018, Petitioner commenced a CPLR Article 78 proceeding to review a resolution of the Board of Trustees of the Village of Muttontown [Respondents] which provided that certain funds held in a fund for the acquisition of parkland were to be transferred into a general capital improvement fund. The petition also sought to annul Local Law No. 2-2018 of the Village of Muttontown to the extent that it provided for the indemnification of Village employees in the amount of any judgment obtained against them for punitive damages and for damages arising out of intentional wrongdoing or recklessness, based upon their acts as employees.

Petitioner asserted, inter alia,*that the resolution and the local law were passed in violation of various laws, including the State Environmental Quality Review Act (SEQRA).

Respondents moved to dismiss the proceeding, inter alia, on grounds of lack of standing. Petitioner opposed the motion, and cross-moved for leave to amend the petition and for leave to file a late notice of claim.

The Supreme Court granted the Respondents' motion, denied Petitioner's cross motion, denied the petition, and dismissed the proceeding. Petitioner appealed the court's rulings.

The Appellate Division sustained the Supreme Court's ruling, explaining that the Respondents' motions were "properly granted", explaining:

1. Generally, to establish standing to challenge governmental action, a petitioner must show that it would "suffer direct injury different from that suffered by the public at large, and that the injury asserted falls within the zone of interests or concerns sought to be promoted or protected by the statutory provision under which the agency has acted" [See Matter of Riverhead PGC, LLC v Town of Riverhead, 73 AD3d 931].

In this instance, the Appellate Division opine Petitioner did not adequately demonstrate that she suffered "direct injury different from that suffered by the public at large" and thus "failed to establish standing to challenge the resolution and the local law pursuant to CPLR article 78.

The Appellate Division also concluded that Supreme Court also correctly determined that the petitioner lacked standing to assert SEQRA claims. "To establish standing under SEQRA", said the court, "a petitioner must show (1) an environmental injury that is in some way different from that of the public at large, and (2) that the alleged injury falls within the zone of interests sought to be protected or promoted by SEQRA," citing Matter of Tuxedo Land Trust, Inc. v Town Bd. of Town of Tuxedo, 112 AD3d 726 and other decisions.

Further, noted the Appellate Division, "[t]o qualify for standing to raise a SEQRA challenge, a party must demonstrate that it will suffer an injury that is environmental and not solely economic in nature.

Thus, Supreme Court had properly granted Respondents' CPLR 3211(a) motion to dismiss the petition, denied the Petitioner's cross motion for leave to amend the petition and for leave to file a late notice of claim, denied the petition, and dismissed the proceeding.

* Latin for "among other things."

Click HERE to access the Appellate Division's ruling in this case.

Failing to follow collective bargaining procedures fatal to application for benefits

Plaintiff, a police officer, was injured in the course of performing his duties as a police officer and was absent from work for a period of time. Plaintiff received benefits pursuant to General Municipal Law §207-c. Returning to work as a police officer in April 2013. In May 2015, Plaintiff applied for §207-c benefits for an absence from work related to injuries sustained in September 2011 and December 2012. Following the rejection of his May 2015 efforts to obtain such §207-c benefits, Plaintiff filed a petition pursuant to CPLR Article 78 seeking a court order directing his employer to provide such benefits.

Supreme Court denied Plaintiff's seeking such a court order and dismissed Plaintiff's  petition. The Appellate Division, however, reversed the Supreme Court's judgment, granted the petition to the extent of annulling the June 5, 2015 determination by the Supreme Court, and remitted the matter to the Supreme Court for the purpose of directing reconsideration of the Plaintiff's application for §207-c benefits after offering the Plaintiff "the opportunity to seek to excuse any technical violations of these procedures where the opportunity to provide such excuse was available pursuant to the terms of the collective bargaining agreement" [see Matter of LaPerche v City of Peekskill, 162 AD3d 665].

Upon remittal, in a determination dated February 4, 2019, a new Chief of Police determined that Plaintiff's failure to comply with the procedures set forth in the collective bargaining agreement should not be excused and again denied the Plaintiff's application for benefits pursuant to §207-c. On March 5, 2019, the Plaintiff's request for a hearing concerning the matter was denied and Plaintiff commenced the instant CPLR Article 78 to review the determination of the new Chief of Police dated February 4, 2019.

Supreme Court denied the petition and dismissed the proceeding, and the Plaintiff appealed that ruling.

Noting that procedures to be followed in connection with applying for General Municipal Law §207-c disability benefits were set out in the relevant collective bargaining agreement, the Appellate Division opined that the determination of the new Chief of Police denying the Plaintiff's application based on the unexcused procedural deficiencies in Plaintiff's application for such benefits was not arbitrary and capricious. Accordingly, the Appellate Division sustained Supreme Court's denied Plaintiff's petition and dismissal of the proceeding.

The Appellate Division explained that judicial review of an administrative determination "that is not made as a result of a hearing held pursuant to direction by law such as a determination denying an application for disability benefits pursuant to General Municipal Law §207-c" is limited to the question of whether the determination was made in violation of lawful procedure, was affected by an error of law or was arbitrary and capricious or an abuse of discretion."

The Appellate Division opined that contrary to Plaintiff's contentions, "there is a rational basis in the record for the determination of the ... new Chief of Police that the proffered explanation for the [Plaintiff's] failure to follow the procedures set forth in the collective bargaining agreement relating to applications for benefits pursuant to General Municipal Law § 207-c was insufficient to excuse his noncompliance".

Accordingly, the Appellate Division concluded that "the determination denying the [Plaintiff's] application based on the unexcused procedural deficiencies in his application was not arbitrary and capricious", citing Matter of Laird v Village of Pelham Manor, 81 AD3d 828.

The Appellate Division said that Plaintiff's contention, in effect, that "the procedures set forth in the collective bargaining agreement relating to applications for benefits pursuant General Municipal Law §207-c are void and unenforceable as being contrary to public policy is without merit."

Click the URL set out below to access  the Appellate Division's ruling in this action

https://www.nycourts.gov/reporter/3dseries/2022/2022_06008.htm

 

Applying the McDonnell Douglas burden-shifting test in adjudicating a Title VII action

Petitioner in this action proceeding pro se, alleged that the Office of the New York State Comptroller [OSC] refused to hire Petitioner because of his race.  Federal District Court, adopting a magistrate judge’s Report and Recommendation, the District Court granted OSC's motion for summary judgment. Petitioner appealed the District Court's ruling.

In response to Appellant's appeal the Circuit Court of Appealsl, Second Circuit, [Second Circuit] said it reviews "a grant of summary judgment de novo," drawing all reasonable inferences and resolve all factual ambiguities in favor of the nonmoving party.  The nonmoving party, however, "may not rely on conclusory allegations or unsubstantiated speculation” in opposing summary judgment.

That said, the Second Circuit observed that the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a)(1) [Title VII] makes it unlawful for an employer “to fail or refuse to hire . . . any individual . . . because of such individual’s race.” Further, observed the Second Circuit, Title VII discrimination claims are analyzed using the familiar McDonnell Douglas burden-shifting test,* which has three prongs: (1) the plaintiff must first establish a prima facie case of discrimination; (2) the defendant must next proffer a legitimate, non-discriminatory reason for its actions; and (3) the plaintiff must then establish that the defendant’s proffered reason was a pretext for unlawful discrimination.

Noting that Plaintiff had "arguably forfeited appellate review of the issue of pretext for unlawful discrimination and the Second Circuit "could affirm on that basis alone", as OSC did not press Plaintiff's non-jurisdictional forfeiture in its brief, the Second Circuit exercised its discretion to reach the merits of Plaintiff's claims of unlawful discrimination “in the interests of justice”.

That said, the Second Circuit said it agreed with the District Court's ruling, explaining even assuming Plaintiff had established a prima facie case of discrimination—his burden under the first prong of the McDonnell Douglas test—he has not provided any evidence that OSC’s reasons for refusing to hire him were pretextual. OSC proffered three legitimate, non-discriminatory reasons for rejecting his application: (1) frequent job shifting, (2) résumé discrepancies, and (3) a poor writing sample. To establish these reasons as pretextual, Plaintiff would need to “point to evidence that reasonably supports a finding of prohibited discrimination.”

The Second Circuit also opined that Plaintiff "must produce evidence such that a rational finder of fact could conclude that the adverse action taken against [Plaintiff] was more likely than not a product of discriminatory animus.”

Concluding that Plaintiff failed to satisfy the third prong of the McDonnell Douglas test, and observing that OSC’s justification for its poor grade of Plaintiff's writing sample did not rely on anything that could suggest pretext but rather OSC’s interviewers specifically expressed concern over grammatical errors in the sample the Second Circuit said its judgment in favor of OSC appropriate as Plaintiff failed to met his burden under the third prong of the McDonnell Douglas test. 

* See McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802–04.

Click HERE to access the Second Circuit's ruling.