Elements considered by courts in actions seeking to vacate an arbitration award

In a proceeding pursuant to CPLR Article 75 to vacate an arbitration award, the Petitioner appealed from a judgment of the Supreme Court denying his petition and dismissing the proceeding. The Appellate Division affirmed the Supreme Court's judgment, with costs.

Noting that judicial review of an arbitration award "is extremely limited", the Appellate Division, citing Hackett v Milbank, Tweed, Hadley & McCloy, 86 NY2d 146, explained that under CPLR 7511, "an [arbitration] award may be vacated only if (1) the rights of a party were prejudiced by corruption, fraud or misconduct in procuring the award, or by the partiality of the arbitrator; (2) the arbitrator exceeded his or her power or failed to make a final and definite award; or (3) the arbitration suffered from an unwaived procedural defect".

"An arbitrator 'exceed[s] [his or her] power within the meaning of the CPLR only when [he or she] issue[s] an award that violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator's power'", citing American Intl. Specialty Lines Ins. Co. v Allied Capital Corp., 35 NY3d 64.

Further, a party seeking to overturn an arbitration award "bears a heavy burden and must establish a ground for vacatur by clear and convincing evidence" (See Matter of Board of Educ. of the Yonkers City Sch. Dist. v Yonkers Fedn. of Teachers, 185 AD3d 811).

The Appellate Division opined that in this action Petitioner "failed to show, by clear and convincing evidence, a basis for vacating the arbitration award pursuant to CPLR 7511."

Click HERE to access the decision of the Appellate Division posted on the Internet.

 

An invitation to join the New York State Comptroller's team

The New York State Comptroller's office employs over 2,700 public servants statewide who are dedicated to ensuring taxpayer dollars are used effectively and for public good. The team consists of auditors, financial, business and policy analysts; information technology specialists, contract managers, investigators, and more.

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• Managing the New York State Pension Fund, one of the best-funded and best-managed public pension plans in the nation.
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Appeal to the Commissioner of Education pursuant to §306 of the Education Law dismissed as untimely, for lack of proper service and for lack of jurisdiction

The Petitioner in this action asked the Commissioner of Education to remove the President of the school district's Board of Education pursuant to §306 of the Education Law, alleging the President defamed him at a board meeting and that the President’s comments "have had a negative personal and professional impact on him."

In rebuttal, the school district contended that Petitioner's application was untimely, must be dismissed for improper service, and the Petitioner's allegations of defamation and slander are outside the jurisdiction of the Commissioner.*

The Commissioner held that the Petitioner's application must be denied as untimely, noting "An appeal to the Commissioner must be commenced within 30 days from the decision or act complained of, unless any delay is excused by the Commissioner for good cause shown". The Commissioner rejected Petitioner's argument that such lateness should be excused "due to his lack of knowledge concerning the appeal process." In the words of the Commissioner this was "not a sufficient basis to excuse a delay in commencing an appeal or removal application", citing a number of Decisions of the Commissioner of Education including Application of S.D., 60 Ed Dept Rep, Decision No. 18,009.

The Commissioner also noted Petitioner's application must also be denied for lack of personal service as §275.8(a) of the Commissioner’s Regulations requires that a petition be personally served upon each named respondent. In this instance Petitioner's affidavit of service indicates that service was made upon the district clerk.  Petitioner, however, was required to serve the President, the individual whose removal he sought, personally.

Addressing the President's request for a certificate of good faith pursuant to Education Law §3811(1) the Commissioner explained that "[such] certification is solely for the purpose of authorizing a board of education to indemnify a respondent for costs incurred in defending against a proceeding arising out of the exercise of the respondent's powers or the performance of the respondent's duties as a board member or other official listed in section 3811(1)". As Petitioner's appeal was dismissed on procedural grounds without any findings on the merits, the Commissioner certified that the President was entitled to the requested certification [see Appeal and Application of Petrocelli, 62 Ed Dept Rep, Decision No. 18,223].

* The Commissioner noted that she "lacked jurisdiction to adjudicate Petitioner’s claims of defamation or slander", citing Appeal of Zwanka, 56 Ed Dept Rep, Decision No. 17,051 and Appeal of Murray, 56 id., Decision No. 17,002.

Click HERE to access the Commissioner's decision posted on the Internet.

 

Cyber attacks on State, local government and school district cyber security systems

In a report issued in October 2023, New York's State Comptroller Thomas P. DiNapoli indicated that:

"Cyberattacks are a serious threat to America’s critical infrastructure and have the potential to severely impact our day-to-day lives. These incidents often result in data breaches for companies and institutions that collect large amounts of personally identifiable data. Data breaches expose New Yorkers to invasions of privacy, the possibility of identity theft and other types of fraud. Even more troubling are incidents such as ransomware or distributed denial of service attacks that have the potential to shut down systems that we rely on for water, power, health care and other necessities."

The report highlights the recent proliferation of cyberattacks, details the most common types; discusses recent efforts to respond to and prevent such attacks; and recommends a policy framework intended to help New York stay ahead of the threat presented by cyberattacks. 

The Office of the State Comptroller [OSC] noted that it is working to help avoid cyber attacks by auditing and uncovering weaknesses in State, local government and school district cyber security systems. Audits by OSC's Divisions of State Government Accountability and Local Government and School Accountability revealed dozens of ransom ware attacks and other data breach incidents that compromised New York State agencies, counties, cities, towns and villages, hospitals and public-school systems, and have identified gaps in cyber security. OSC said "Understanding and addressing these weaknesses can help New York State remain vigilant."

OCS noted that it "will continue to dedicate attention and resources to protecting New York residents and institutions from these attacks."

Click HERE to access the State Comptroller's October 2023 report.

 

Substantial evidence

The determination of appointing authority [Employer] which terminated Petitioner's employment based on the report and recommendation of an Administrative Law Judge was unanimously confirmed by the Appellate Division. 

The court noted that "Substantial evidence supports [the Employer's] determination that Petitioner violated Department directives and procedures concerning the retrieval of inmate property, engaged in undue familiarity with an inmate, failed to submit a required unusual incident report, used excessive force against an inmate, and made false and misleading statements.] 

Under the circumstances the Appellate Division opined that "The penalty of termination of petitioner's employment does not shock one's sense of fairness", citing Matter of Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222, among other decisions.

Click HERE to access the Appellate Division's decision posted on the Internet.