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

New York State Comptroller Thomas P. DiNapoli announced the following audits were issued during the week ending March 8, 2019.

New York State Comptroller Thomas P. DiNapoli announced the following audits were issued during the week ending March 8, 2019.

Source: Office of the State Comptroller

Links to material posted on the Internet highlighted in COLOR

Office of Alcoholism and Substance Abuse Services (OASAS): Problem Gambling Treatment Program (2018-S-39)
OASAS has not conducted a comprehensive needs assessment or social impact study to identify the number or location of individuals in need of problem gambling treatment services since 2006, even though four commercial casinos opened in New York State in 2013. Therefore, auditors could not determine whether OASAS has sufficient treatment programs available for those in need.

Department of Health: Medicaid Claims Processing Activity Oct. 1, 2017 Through March 31, 2017 (2017-S-63)
Auditors identified over $119 million in improper Medicaid payments, including $107.7 million in Medicaid managed care premiums were paid on behalf of recipients with concurrent comprehensive third-party health insurance. By the end of the audit fieldwork, about $6.7 million of the improper payments had been recovered. Auditors also identified 38 active Medicaid providers who were charged with or found guilty of crimes that violated laws or regulations governing certain health care programs.

Metropolitan Transportation Authority: Long Island Rail Road: Unexpected Delays and Events (2018-S-30)
Auditors reviewed 49 unexpected delays and events over a 2½-year period and found that, in some cases, the needs of passengers were not adequately addressed. All notifications of delays or unexpected events were not always made, alternative transportation arrangements were not documented, and procedures were not clear.

Metropolitan Transportation Authority Homeless Outreach Program at the Metro-North Railroad (2018-S-36)
In June 2017, Metro-North entered into a five-year contract (totaling $2,142,399) with Bowery Residents’ Committee (BRC) to provide homeless outreach services. Despite the requirement under the contract, Metro-North has not developed any quantifiable performance measures for the BRC contract and, as a result, has no basis for determining whether BRC’s outreach services are meeting expectations for assisting homeless clients. The homeless outreach data BRC reported was not accurate or complete, and Metro-North does not have a process in place to verify reported data.

New York State Health Insurance Program: CVS Health: Accuracy of Drug Rebate Revenue Remitted to the Department of Civil Service (2016-S-41)
Auditors reviewed the rebate revenue generated from agreements with six drug manufacturers and found that CVS Health did not always properly invoice drug manufacturers for rebates or remit all rebate revenue to Civil Service that it collected. As a result, Civil Service is due $2,052,653 in rebates.

State Education Department (SED): Association to Benefit Children (ABC): Compliance With the Reimbursable Cost Manual (2017-S-28)
For the fiscal year ended June 30, 2014, auditors identified $263,196 in ineligible costs that ABC reported for reimbursement and recommend such costs be disallowed. These ineligible costs included $164,004 in personal service costs, $13,696 in other than personal service costs and $85,496 in depreciation expenses.

State Education Department (SED): Facilities Planning Bureau Project Review (2018-S-2)
SED does not perform project plan reviews timely, and lacks guidelines that define a reasonable time period to review a project. As of August 2018, SED estimated a lag time to begin its architectural and engineering reviews as two to four weeks and 38 to 40 weeks, respectively. While the agency has taken some steps to address this issue, staff vacancies and new responsibilities continue to contribute to the project review backlog.

Cortland County – Claims Audit and Check Printing (2018M-247)
The Cortland County Legislature has not audited claims since 2015. These deficiencies occurred primarily because the legislature did not consider other options available to it by law, such as establishing a comptroller position responsible for auditing claims or retaining the legislature’s claims audit responsibility.

Town of Harrison – Budgeting Practices (Westchester County)
Auditors compared budgeted revenues and expenditures with operating results for 2013 through 2017 and found that expenditure estimates were generally reasonable except for police special detail. However, the board underestimated revenues by an average of $3.08 million each year, for a cumulative total of more than $15.4 million.

Village of Muttontown – Board Oversight (Nassau County)
The board did not annually audit the clerk-treasurer’s records from 2014-15 through 2017-18 to ensure all money was properly accounted for.

Town of Parma – Real Property Tax Exemptions Administration (Monroe County)
The town granted a total of 1,479 non-NYS STAR property tax exemptions for non-municipal-owned property on the 2017 assessment roll, collectively reducing the town’s 2018 taxable assessed value by more than $89.02 million.

Town of Seneca Falls – Town Hall Capital Project (Seneca County)
The board established an initial amount of nearly $2.6 million to be used from its capital reserve for a project to construct a new town hall. However, it did not prepare an itemized project budget and did not appropriately monitor the project. As a result, the town incurred total project costs of approximately $4.55 million.

Town of Woodstock – Information Technology (Ulster County)
The town adopted a computer privacy policy that states that computers are to be used for business purposes only. However, officials did not design or implement procedures to monitor compliance with the policy or determine the amount of employees’ personal use.

Hearing Officer's credibility determination given "due deference" where there is conflicting evidence in the record

Hearing Officer's credibility determination given "due deference" where there is conflicting evidence in the record

Matter of Buckshaw v DiNapoli, 2019 NY Slip Op 00944, Appellate Division, Third Department

The Employees' Retirement System denied the application filed by Petitioner, a police officer, for accidental disability retirement benefits based upon incidents that occurred in January 2014 and November 2014 — both of which allegedly resulted in injuries to Petitioner's left knee on the grounds that neither of the incidents constituted accidents within the meaning of Retirement and Social Security Law §363. 

Petitioner appealed the System's decision and a hearing was held. The Hearing Officer sustained the System's denial of accidental disability retirement benefits, finding that the November 2014 incident did not constitute an accident.* The Comptroller adopted the Hearing Officer's findings and conclusions. Petitioner then initiated a CPLR Article 78 proceeding challenging the Comptroller's determination.

Initially the Appellate Division noted that an applicant for accidental disability retirement benefits bears "the burden of demonstrating that his or her disability arose out of an accident as defined by the Retirement and Social Security Law, and [the Comptroller's] determination in that regard will be upheld if supported by substantial evidence..... " Citing Matter of Stancarone v DiNapoli, 161 AD3d 144, the court then explained that "To be deemed accidental, an injury must not have been the result of activities undertaken in the ordinary course of [the employee's] job duties but, rather, must be due to a precipitating accidental event [that] is not a risk of the work performed."

In his written statement describing the November 2014 incident, Petitioner had indicated that he and another police officer had responded to a residential domestic call involving a mother and her agitated son. According to Petitioner's written statement, the individual struggled until he was restrained on a stretcher and placed in an ambulance for transport. Although the second police officer did not testify at the hearing, "his written statement mirrored the account of the incident set forth in [Petitioner's] written statement" -- specifically, that he and [Petitioner] attempted to restrain the still-struggling individual, whose legs thereafter became entangled with [Petitioner's] legs, resulting in an injury to Petitioner's left knee.

At the hearing, however, Petitioner described a different version of event, i.e., he alone successfully restrained the individual and his resulting injury to his left knee "stemmed not from any entanglement with the individual he was attempting to subdue but, rather, from a defect in the wall-to-wall carpeting in the residence." Further, Petitioner testified that he refused the other officer's offer of assistance because he had the individual "under complete control" prior to attempting to move him from the couch to the floor and that his injury occurred as he planted his left foot on the floor and initiated this transfer whereupon the carpeting buckled and shifted, "causing his leg to slide underneath the couch, at which point his left knee "popped."

The court opined that had Petitioner's account of the November 2014 incident as set forth in his hearing testimony been credited, the Comptroller could have reasonably had concluded constituted an accident for purposes of granting Petitioner accidental disability retirement benefits. However, said the Appellate Division, Petitioner's written statements and his oral testimony are contradictory and this presented a credibility issue for the Hearing Officer and, later, the Comptroller, to resolve.

As summarized by the Appellate Division, the Hearing Officer credited the account of the incident as set forth in Petitioner's written statement and, in so doing, reasonably concluded that Petitioner's injury resulted from restraining an unruly individual, which, in turn, constituted an inherent risk of Petitioner's employment as a police officer rather than "an accident."

Here the court gave "due deference" to the Hearing Officer's credibility determination and thus concluded that the Comptroller's determination was supported by substantial evidence and decline to disturb it. Courts typically accord "great deference" to a hearing officer's credibility determination unless the determination is found to be "irrational or unreasonable."

* A hearing was held at which Petitioner withdrew the January 2014 incident as a basis for his application for accidental disability retirement, going forward only with his claim for benefits based on the November 2014 incident. Ultimately Petitioner applied for, and was granted, performance of duty disability retirement benefits.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_00944.htm