In Gallivan v Cuomo, the Fourth Department gave pandemic litigation watchers and appellate lawyers like me a little bit of everything. It was interesting when Supreme Court issued a temporary restraining order against enforcement of Governor Cuomo’s executive order requiring restaurants across the State to close at 10 PM to slow the spread of COVID-19. It was intriguing when the Fourth Department temporarily stayed that TRO last week. And it’s downright fascinating now that the Court has issued a 19-page decision vacating the TRO in its entirety.
First let’s set the stage. As the coronavirus pandemic reached New York in March 2020, the New York Legislature expanded the Governor’s powers to issue directives designed to slow the spread of the virus, and provided that the expanded powers would sunset on April 30, 2021. Using that expanded authority, in Executive Order 202.74 issued in November 2020, Governor Cuomo imposed a 10 PM curfew on restaurants because “patrons who stay out later than 10:00 PM tend to consume more alcohol and that, in turn, makes such patrons less likely to adhere to the stringent personal conduct (such as masking and social distancing) necessary to safely congregate with others.” (Decision, at 5).
The Challenge to the Restaurant Curfew, the TRO, and the Fourth Department’s Vacatur
A coalition of restaurant owners in Erie and Monroe Counties challenged the 10 PM curfew executive order, arguing that the Legislature’s expansion of the Governor’s emergency powers under Executive Law 29-a was an unconstitutional delegation of legislative authority, and that the 10 PM curfew itself was arbitrary, violated the statute, and violated the restauranteurs’ equal protection rights. They sought a temporary restraining order from Supreme Court by order to show cause, giving the State notice that they would be presenting the proposed order including the temporary relief and an opportunity to be present to oppose it. After hearing arguments from both sides, Supreme Court signed the order to show cause with the TRO and directed that it be served on the State.
The State then moved immediately in the Fourth Department under CPLR 5704 (a) to vacate the TRO, and sought a temporary stay while its motion was being decided. The Fourth Department granted the temporary stay, and after full briefing of the State’s motion, vacated the TRO. The Court held that the plaintiffs were not likely to succeed on their claims, and thus could not satisfy their burden for a TRO. In particular, the Court held that the powers temporarily granted to the Governor to address the pandemic were not an unconstitutional delegation of legislative authority because it provided sufficient limits on the emergency powers. The executive orders must be necessarily designed to cope with the pandemic and reasonably necessary to enforce the directives. They are limited to 30-day durations, and are subject to a “unique legislative-veto procedure” where the Legislature can immediately terminate any executive order by issuing a concurrent resolution (Decision, at 14). And most importantly, the Court noted, the expanded emergency powers will sunset on April 30, 2021 absent further legislative action. As the Court put it,
The remainder of the plaintiffs’ claims were moot, the Court held, because Executive Order 202.94, issued after the TRO was granted, changed the curfew to 11 PM. Because the plaintiffs’ claims were based solely on the 10 PM curfew, the Court held that, although the claims could be amended at Supreme Court to challenge the new restrictions, the current versions of the claims no longer presented a live controversy to decide. And so, the TRO was vacated, and the 11 PM curfew remains in effect.
A TRO is an Order Granted Without Notice Under CPLR 5704 (a)
Beyond the Court’s decision on the merits of the plaintiffs’ claims, the case is noteworthy for two other reasons. First, written motion decisions at the Appellate Division that include the Court’s reasoning are rare. Usually, the courts issue one or two line motion decisions only stating what relief is being granted or denied, without any reasoning for the decision at all. Second, this 19-page decision from the Fourth Department is very helpful to understand what is permitted under CPLR 5704 (a), a little understood area of appellate practice in New York.
CPLR 5704 (a) provides an avenue for quick relief at the Appellate Division when a TRO or other order is entered without notice against your client at Supreme Court. It provides, “[t]he appellate division or a justice thereof may vacate or modify any order granted without notice to the adverse party by any court or a judge thereof from which an appeal would lie to such appellate division.” What’s most often misunderstood, however, is what exactly is an “order granted without notice.” A temporary restraining order is rarely entered without notice to the other side and the parties all arguing before the Supreme Court. How is that not sufficient notice? In Gallivan, the Fourth Department (technically, a single Justice of the Fourth Department) explained.
When the State moved at the Appellate Division to vacate the TRO against enforcement of the curfew, the Plaintiffs argued that CPLR 5704 (a) didn’t apply because the State was given notice of the order to show cause seeking the TRO before the Judge signed it, and appeared to argue in opposition. But that’s a mistaken view of what “without notice” under CPLR 5704 actually references, Justice NeMoyer held. “Notice” is a technical legal term under the CPLR, and relates to how motions are made under CPLR article 22. Justice NeMoyer explained, the condition precedent to a CPLR 5704 (a) motion—an “order granted without notice”—only exists when a “written judicial determination” is issued “‘not predicated upon a motion made on notice'” (Decision, at 8, quoting Matter of Gliklad v Deripaska, 185 AD3d 512, 512 [1st Dept 2020]).
When an order to show cause is presented to bring on a motion, the motion isn’t actually made “on notice” until the order is signed and the signed order is served with the listed supporting papers on the other side. And when that order to show cause contains a TRO, it is necessarily granted “without notice” within the meaning of CPLR 5704 (a) because there was no motion on notice made before the order to show cause was signed. So, even if you’re given notice of a temporary restraining order application, as required under section 202.7(f) of the Uniform Trial Court Rules, and show up to argue that the Judge should strike out the TRO from the order to show cause before signing it, the entry of the TRO is still technically “without notice” and you can run immediately to the Appellate Division to have the TRO vacated under CPLR 5704 (a). Can’t say I haven’t had to do that once or twice.
Justice NeMoyer’s decision in Gallivan is a prime example for why more New York appellate courts should use their motion orders to explain interesting and complex jurisdictional and other issues that arise largely only in the context of appellate motions. The explanations could be short and to the point, but New York appellate practice would be better for it.
For the first half of the New York Court of Appeals 2020-21 argument term, the Court granted leave to appeal in 11 cases. Unlike most years, however, this time the majority came from the upstate Appellate Division departments: 4 came from the First Department, only 1 from the Second Department, 3 from the Third Department, and 3 from the Fourth Department. In most recent years, the vast majority of leave grants have come from the First and Second Departments, with the Third and Fourth Departments lagging far behind. That will be something to watch as the Court considers leave motions in the second half of the term.
Here’s a quick look at the recent cases headed to the Court of Appeals:
Ace Securities Corp. v DB Structured Prods., Inc., 177 AD3d 493 (1st Dept 2019)
Issue presented: Is the trustee of a residential mortgage-backed securities trust is a “plaintiff” within the meaning of CPLR 205(a) when the prior action was commenced by the trust’s certificate holders?
Holding below: Supreme Court, New York County, granted defendant’s motion to dismiss the complaint, with prejudice, holding that the trustee of a residential mortgage-backed securities trust was not a “plaintiff” for purposes of the 6-month extension of time to commence a new action under CPLR 205(a) where the initial action was commenced by the trust’s certificate holders. The Appellate Division, First Department affirmed based on its prior holding in U.S. Bank N.A. v DLJ Mtge. Capital, Inc. (141 AD3d 431 [1st Dept 2016], affd33 NY3d 84 ).
Matter of Callen v New York City Loft Bd., 181 AD3d 39 (1st Dept 2020)
Issue presented: Does the New York City Loft Board have the authority to deny a tenant’s request to withdraw an application for the legal conversion of a loft from commercial use to residential use pursuant to the Loft Law (see Multiple Dwelling Law 7-C)?
Holding below: Supreme Court, New York County, granted the tenants’ petitions to annul New York City Loft Board’s determination, which had rejected a proposed settlement agreement between the building owner and residential tenants and remanded the matter for administrative resolution of the tenants’ application for Loft Law coverage. The Appellate Division, First Department modified, holding that the tenants had the right to withdraw their applications for conversion, but once they did, the Loft Board lacked authority to approve or enforce the settlement agreement.
Matter of Mental Hygiene Legal Serv. v Delaney, 176 AD3d 24 (3d Dept 2019)
Issue presented: Is mandamus available to challenge the placement of a developmentally disabled child in hospital emergency room while the child waited for a residential placement? Does the Medicaid Act’s requirement that medical assistance “shall be furnished with reasonable promptness to all eligible individuals” (42 USC § 1396a [a] ) give rise to a private right of action? Did the respondent’s failure to provide the child with certain services violate the Americans with Disabilities Act?
Holding below: Supreme Court, Clinton County, dismissed the petitioner’s application to, among other things, challenge the placement of the subject child at the respondent hospital and the services provided by the Office for People with Developmental Disabilities and the Department of Health. The Appellate Division, Third Department affirmed.
Matter of Endara-Caicedo v New York State Dept. of Motor Vehs., 180 AD3d 499 (1st Dept 2020)
Issue presented: Can the refusal of a motorist arrested for operating a motor vehicle while under the influence of alcohol or drugs to submit to a chemical test be used against the motorist in administrative license revocation hearings, even if the chemical test is offered, and the refusal occurs, more than two hours after the motorist’s arrest?
Holding below: Supreme Court, Bronx County, denied the petition to annul the DMV’s determination, which, after a hearing, revoked the petitioner’s license to drive for at least one year and imposed a $500 civil penalty. The Appellate Division, First Department affirmed.
Moore Charitable Found. v PJT Partners, Inc., 178 AD3d 433 (1st Dept 2019)
Issue presented: Does the complaint states a cause of action for negligent supervision?
Holding below: Supreme Court, New York County, granted the corporate defendants’ motion to dismiss the causes of action for fraud based on respondent superior and negligence, and denied the motion as to the cause of action for fraud based on apparent authority, and denied the plaintiff’s request to amend the complaint. The Appellate Division, First Department modified to dismiss the cause of action for fraud based on apparent authority, and otherwise affirmed.
Matter of Miller v Annucci, Appellate Division, Third Department order of Nov. 7, 2019
Issue presented: Did the Appellate Division properly dismissed the appeal as untimely?
Holding below: Supreme Court, Albany County, dismissed the complaint/petition. The Appellate Division, Third Department dismissed the appeal as untimely taken.
Matter of Johnson v City of New York, 180 AD3d 1134 (3d Dept 2020)
Issue presented: Must an award of workers’ compensation benefits for a schedule of loss of use (SLU) attributable to an injury to one part of a qualifying limb be offset by a prior award for an injury involving a different part of the same qualifying limb?
Holding below: The Workers’ Compensation Board, among other things, ruled that the claimant sustained a 30% schedule loss of use of his left leg and a 0% schedule loss of use of his right leg as a result of a February 2006 accident. The Appellate Division, Third Department affirmed.
Konkur v Utica Academy of Science Charter Sch., 181 AD3d 1271 (4th Dept 2020)
Issue presented: Does Labor Law § 198-b, which prohibits wage kick-backs, provides for a private right of action?
Holding below: After Supreme Court, Oneida County, among other things, denied in part High Way Education, Inc.’s motion to dismiss the complaint against it, the Appellate Division, Fourth Department reversed and dismissed the complaint against High Way Education, Inc. in its entirety because “the legislature did not intend to create a private right of action for violations of Labor Law § 198-b.”
Hunters for Deer, Inc. v Town of Smithtown, 186 AD3d 682 (2d Dept 2020)
Issue presented: Does Environmental Conservation Law § 11-0931(4)(a)(2), which provides for minimum setback limits for the discharge of a bow and arrow, preempt local municipal codes regulating the same issue?
Holding below: Supreme Court, Suffolk County, denied that branch of the plaintiffs’ motion which sought summary judgment declaring that chapter 160 of the Code of the Town of Smithtown is invalid as applied to the discharge setback of a bow and arrow, and granted that branch of the defendant’s cross motion which was for summary judgment dismissing that part of the complaint. The Appellate Division, Second Department reversed, holding that the local code was preempted, and remitted the matter to Supreme Court for the entry of a judgment declaring that chapter 160 of the Code of the Town of Smithtown is invalid as applied to the discharge setback of a bow and arrow.
Schoch v Lake Champlain OB-GYN, P.C., 184 AD3d 338 (3d Dept 2020)
Issue presented: Was the defendant employer was entitled to receive cash consideration resulting from the demutualization of an insurance fund where the employer purchased the insurance policy and paid all the premiums but where the employee is named as the sole insured on the policy, and is the employee unjustly enriched by the receipt of the cash consideration?
Supreme Court, Saratoga County, issued a declaration in the employer’s favor. The Appellate Division, Third Department reversed, denied the employer’s cross motion for summary judgment, granted the employee’s motion for summary judgment, and declared that the employee is solely entitled to the $74,747.03 cash consideration from Medical Liability Mutual Insurance Company’s demutualization, plus interest for the time the proceeds were in escrow, because the employee was the named insured on the policy.
Issue presented: Is a worker who fails to check the position of a ladder or its locking mechanism before climbing it to perform elevated work the sole proximate cause of his injuries under Labor Law § 240 (1)?
Holding below: After Supreme Court granted the worker partial summary judgment on liability for his Labor Law § 240 (1) claim, the Appellate Division, Fourth Department, with two Justices dissenting, reversed and denied partial summary judgment, holding that the worker did not satisfy his initial burden because he “did not know why the ladder wobbled or shifted, and he acknowledged that he might not have checked the positioning of the ladder or the locking mechanism, despite having been aware of the need to do so.” Following a trial verdict in the defendant’s favor, the Fourth Department affirmed the judgment of dismissal.
Issue presented: Does a beneficiary’s position of trust with a decedent require an inference of undue influence in disposition of assets in a will?
Holding below: Supreme Court denied the application to admit to probate the December 5, 2012 will of the deceased and invalidated various transactions. The Appellate Division, Fourth Department reversed, granted the application to admit the will to probate, and held that a mere position of trust with the decedent was not enough to trigger an inference of undue influence.
This article first appeared in the December 2020 edition of the NYSBA Journal, which can be found here. A direct link to the article is here.
2020 has been a year unlike any other. With the spread of COVID-19 growing in New York exponentially in March, Chief Judge Janet DiFiore and the entire court system decided to take unprecedented action to limit in-court proceedings to only those essential for the administration of justice. The Court of Appeals was no exception. And yet, through it all, the Court diligently continued its work, deciding novel issues of statewide importance and ensuring that wheels of justice continued to turn. Here’s a quick look back at this extraordinary year at the Court of Appeals.
COVID-19 Brings Social Distancing to the Court of Appeals
Although the Court at first decided to proceed with the oral arguments scheduled for its March session in person, with an option for argument by videoconference, only the first day of argument ended up going forward. It was a remarkable sight to see the Court observing social distancing by moving Chief Judge DiFiore, Judge Rivera, and Judge Stein from their normal positions on the bench to the advocates’ tables in front of the bench, while Judges Fahey, Garcia, Wilson, and Feinman spread out along the bench behind them. As they say, a picture is worth a thousand words:
Behind the advocates was an eerily empty courtroom that echoed with each argument. As the pandemic continued, the Court decided to take a small number of its April/May Session arguments on submission, and then in June, held virtual arguments for the first time in the Court’s history. Even now when arguments are back to being heard in person, only the Judges and the advocates are allowed in the courtroom, everyone is wearing masks, the argument podium has been removed, and counsel are arguing the most important cases in the state seated at tables like it’s a roundtable discussion on the finer points of New York law. These are remarkable times.
The Court of Appeals’ Business Continues Nevertheless, But at a Reduced Volume
Even with the pandemic whirling around us, the Court of Appeals continued its regular practice of deciding cases about 30 days after they were argued, and handed down a number of noteworthy decisions this year. The total number of appeals that the Court has decided, however, has decreased considerably. For example, between 2017 and 2019, the Court decided an average of 128 appeals per year (approximately 99 in the normal course on full briefing and oral argument, and 29 on the sua sponte merits track on letter briefing only per year). This year, in contrast, through the end of October, the Court has decided 45 appeals in the normal course and 16 appeals on the sua sponte merits track. If that pace continues, the Court will end up deciding only about 76 appeals this year, which is well below its average for the last three.
Although much of the decline can be chalked up to dealing with the COVID-19 pandemic, the reduction in the total volume of appeals that the Court of Appeals decides is consistent with a troubling trend that can be observed over the last number of years. Between 2010 and 2016, the Court decided an average of 234 appeals per year, about 190 of which were in the normal course with oral argument. But in 2017, that number began to dip significantly. That year, only 142 appeals were decided, 110 of which were following full briefing and oral argument. In 2018, it was 136 appeals (104 in the normal course), and in 2019, it was down to 108 appeals (only 83 in the normal course).
The significant reduction in the Court’s caseload means that it is not only much harder to get a case to the Court of Appeals (the Court granted only 2.1% of its civil motions for leave to appeal in 2019, and has granted leave in only 20 civil cases this year so far), but also to get women and other historically underrepresented groups opportunities to argue in our state’s highest court. In 2019, for example, the Court of Appeals heard 168 total oral arguments, only 50 of which were given by women. Although the 30% rate is larger than the rate seen at the United States Supreme Court, for example, the rate masks a significant divide between arguments in criminal cases and those in civil cases. Women argued in 44% of criminal cases in 2019 (31 criminal arguments out of 71 total), but only 20% of civil cases (19 civil arguments out of 97 total). The 168 total available argument spots in 2019 was down from the 372 total available arguments in 2016 and the 420 total available arguments in 2012.
In 2020, the Court of Appeals heard only 115 oral arguments (42 in criminal cases, 73 in civil cases), well off the pace of last year because the pandemic forced the Court to cancel all but one argument day in March, April, and May. Again, there is a marked divide in the rate of arguments by women in civil and criminal cases. Although women have argued 50% of the criminal cases this year (21 out of the 42 available arguments), they have only argued 25% of the civil cases (18 out of 73 arguments). It’s time for the Court tackle this issue head on. Besides granting leave to appeal in more cases to provide more total opportunities for argument in the state’s most important cases, the Court should, at the very least, amend its rules to expressly encourage arguments by women and other underrepresented advocates in our state’s highest court.
Now, on to this year’s most notable Court of Appeals decisions:
Matter of Vega (Postmates Inc.—Commissioner of Labor), 35 NY3d 131 (Mar. 26, 2020): In a decision that could significantly drive up costs for businesses in the gig economy, the Court held that couriers for Postmates—a delivery business that uses a website and smartphone app to coordinate deliveries from restaurants and stores to people across the country—are employees, not independent contractors, requiring Postmates to make unemployment insurance contributions for them. The Court held that Postmates exercised more than incidental control over the couriers’ work by “dictating to which customers they can deliver, where to deliver the requested items, effectively limiting the time frame for delivery and controlling all aspects of pricing and payment,” even though the couriers could choose their own work schedules and delivery routes. Although this decision was made in the context of unemployment insurance, its rationale for holding the gig economy couriers to be employees could also have significant impacts in wage and hour cases based on the misclassification, and could establish that the couriers should be entitled to a number of other employment rights that are typically afforded to employees, but denied to independent contractors.
Bill Birds, Inc. v Stein Law Firm, P.C., 35 NY3d 173 (Mar. 31, 2020): What lawyer hasn’t worried that a client may one day sue over legal advice that was given during the course of a representation? If you have, this Court of Appeals decision is worth reading. Narrowing the possible avenues for such a suit against lawyers and law firms, the Court held that claims brought under Judiciary Law § 487 (1), which provides that an attorney “who . . . [i]s guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party” is guilty of a misdemeanor and may be liable to the injured party for treble damages in a civil action, does not “extend to negligent acts or conduct that constitutes only legal malpractice,” and does not cover pre-suit advice. Thus, the Court affirmed the dismissal of a section 487 (1) claim against a law firm that had alleged the plaintiffs were “induced to file meritless lawsuit based on misleading legal advice.”
Matter of Regina Metropolitan Co., LLC v New York State Div. of Hous. & Community Renewal, 35 NY3d 332 (Apr. 2, 2020): In a case that was poised to have a huge impact on rent stabilized housing in New York City and on landlords in particular, the Court of Appeals held that the proper method for calculating the recoverable rent overcharges for apartments that were improperly removed from rent stabilization during receipt of J-51 benefits was to start with the rent charged four years before the case was filed, adding any legal increases that applied during the statute of limitations period, and then compute the difference between the legal rent and the rent that was actually charged. Resolving a previously unsettled question, the Court held that the rental history that occurred before the four-year lookback period could not be considered. Notably, however, the impact that this decision could have had was largely muted when, while these appeals were pending, the Legislature amended the Rent Stabilization Law to change the rent overcharge calculation. Although the tenants asked the Court to apply the new amendments retroactively to their cases, the Court declined to do so because it would have imposed a huge unexpected liability on the apartment owners that was not contemplated under the pre-amendment RSL, and would not have comported with due process.
Colon v Martin, 35 NY3d 75 (May 7, 2020): When a claimant looks to sue a municipality in tort, they must first serve the municipality with a notice of claim. Under General Municipal Law § 50-h, the municipality has the right to depose the claimant before an action is commenced. Resolving a matter of first impression, the Court of Appeals held that when there is more than one claimant named in a notice of claim, the municipality has the right to depose each separately outside the presence of the other. The statute’s reference to permitting the claimant to have “such examination in the presence of his or her own personal physician and such relative or other person as he or she may elect” refers only to the physical examination contemplated by the statute, not to the oral deposition. Thus, failure of the claimants to accede to the municipality’s request to conduct separate section 50-h depositions warranted dismissal of the action.
Matter of National Fuel Gas Supply Co. v Schueckler, 35 NY3d 297 (June 25, 2020): Given New York’s bountiful oil and natural gas reserves, development of interstate transmission lines has consistently been proposed across the state. In the course of those projects, development companies generally must establish, under Eminent Domain Procedure Law § 204 (B), that the projects have a public benefit before the companies may exercise eminent domain powers to take the easements necessary to build the pipeline. In NFG, the Court of Appeals was asked whether a company that has been issued a Federal Energy Regulatory Commission certificate of public convenience and necessity for a project, based upon a review similar to that required under EDPL 204 (B), could continue to exercise eminent domain powers even if the New York State Department of Environmental Conservation had denied a required water quality certification for the project. The Court held that it could. The DEC’s denial of the water quality certification did not impair the validity of the FERC certificate of public convenience and necessity, the Court held, because the FERC certificate only conditioned construction of the project on receipt of the water quality certificate; it did not condition the exercise of eminent domain powers.
People v Hinshaw, 35 NY3d 427 (Sept. 1, 2020): The Court of Appeals’ precedent, especially when it concerns the constitutional rights of criminal defendants, regularly shows that the state constitution continues to play a significant role in protecting the rights of New Yorkers. This time, the Court clarified that, under the state constitution, New York requires probable cause of a traffic infraction for law enforcement to conduct a traffic stop of a car, or reasonable suspicion that a crime has been committed. As the Court noted, this upholds New York’s tradition of providing more protection for New Yorkers under the state constitution than is otherwise provided under the federal constitution, which permits traffic stops based only upon reasonable suspicion.
Hewitt v Palmer Veterinary Clinic, PC, __ NY3d __, 2020 NY Slip Op 05975 (Oct. 22, 2020): As everyone remembers from law school, pet owners get one free bite before they can be held strictly liable for injuries that their pets cause. The one free bite rule is essentially a notice requirement; once a pet owner knows that their pet has vicious propensities because the pet has bitten or injured someone before, the owner may be held liable without regard to their negligence for any subsequent injury that the pet causes. The one free bite prior notice rule, however, doesn’t apply to veterinary clinics, the Court of Appeals held in Hewitt. Veterinary clinics are already on notice of the dangers that may exist in their waiting rooms when a pet that is ill, distressed, or has just been treated is brought into that space. Indeed, the Court held, because the clinics have “specialized knowledge relating to animal behavior and the treatment of animals who may be ill, injured, in pain, or otherwise distressed” and “are uniquely well-equipped to anticipate and guard against the risk of aggressive animal behavior that may occur in their practices—an environment over which they have substantial control, and which potentially may be designed to mitigate this risk,” no prior notice of an animal’s vicious propensities is required before the clinic may be held liable for injuries caused by a pet in the clinic’s waiting room.
The Court of Appeals Expands Digital Filings and Amends Service Requirements
What’s most notable about this rule change to me is that the Court is significantly reducing the amount of printed paper copies of the motion papers that have to be filed in the Clerk’s Office (from 6 copies to 1), and eliminating entirely the requirement to file paper copies of the Appellate Division briefs and record that must normally accompany civil motions for leave to appeal. Another change to note: under the Court’s rules, counsel used to have to serve the other side with two copies of a motion for leave to appeal, and the affidavit of service needed to note specifically that two copies were served. No longer. Now, only one copy of the motion needs to be served.
Looking to 2021 at the Court of Appeals
Throughout 2020, the Court of Appeals has adapted to the difficult times, shifted its procedures to ensure the safety of its staff and the parties that appear before it, and set a great example for how to remain productive during an unprecedented pandemic. Looking to next year, the Court will decide another slate of novel issues, including whether the state constitutional ban on gambling precludes the legislature from authorizing daily fantasy sports without a constitutional amendment and whether the Forever Wild clause of the New York Constitution precludes the State from cutting the trees necessary to create community connector snowmobile trails throughout the Adirondacks, but will be doing so with a new Associate Judge on the bench.
On November 2, 2020, Associate Judge Leslie Stein announced that she will be retiring from the Court of Appeals bench effective June 4, 2021. That was very surprising news. Judge Stein, who joined the Court in 2015, was not slated to reach mandatory retirement until 2026. Her decision to retire now opens two seats on the bench in 2021, along with Associate Judge Eugene Fahey, who will be forced into mandatory retirement on December 31, 2021. With Judge Stein’s upcoming retirement, the Court will lose a distinguished jurist who often found herself as the deciding vote in split cases, and Governor Andrew Cuomo will have yet another chance to appoint a new Judge to our state’s highest bench (this will be his ninth appointment to the seven-member bench). With all of this change ahead, 2021 is sure to be another exciting year at the Court of Appeals.
In a very surprising announcement, somewhat buried in the late afternoon on the day before election day 2020, Associate Judge Leslie Stein announced that she would be retiring from the Court of Appeals bench effective June 4, 2021. Judge Stein, who joined the Court on February 9, 2015, wasn’t slated to reach New York’s mandatory retirement age of 70 until 2026. Her retirement 5 years early opens 2 seats on the Court’s bench in 2021, with Associate Judge Eugene Fahey also leaving the bench at the end of the year, forced into mandatory retirement on December 31, 2021.
There will be a lot of time between now and June 4, 2021 to reflect on Judge Stein’s legacy on the Court (and I surely plan to), but for now the fun begins with speculation about who is likely to take Judge Stein’s seat following her retirement. The likely list is long, so let’s take a look at some of the top candidates. Let me be clear, this is pure speculation. I have absolutely no knowledge about who Governor Cuomo is likely to pick or even what characteristics he will look for in a new Court of Appeals judge. But let’s guess anyway just for fun.
First, a refresher on the appointment process. As provided under Judiciary Law s 68 (2), when a vacancy on the Court of Appeals occurs other than because of the expiration of the retiring Judge’s term, the Clerk of the Court must immediately notify the Commission on Judicial Nomination, which then has 120 days to solicit applicants, investigate their qualifications, and recommend a list of up to 7 people for the Governor’s consideration. Once the Governor receives the list, he must appoint someone from the list to Court no sooner than 15 days and no longer 30 days after that, subject of course to New York State Senate confirmation. Once confirmed, the judge can then join the bench as soon as later that afternoon.
The Repeat Nomination Candidates
What’s remarkable about appointments to the Court of Appeals is that judges often have to make the nomination list a number of times before they are actually selected by the Governor. For example, Associate Judge Howard Levine was appointed to the Court in 1993 in his seventh appearance on the nomination list. More recently, it took Judge Rowan Wilson six times on the list before the Governor selected him to replace retiring Associate Judge Eugene Pigott. Judge Michael Garcia, on the other hand, made it on the Court in only his second time on the list.
Looking at the prior nomination lists is a good place to start when trying to predict who might be nominated to replace Judge Stein.
1.Hon. Erin Peradotto, Associate Justice, Appellate Division, Fourth Department
Justice Peradotto has been named on the Commission of Judicial Nomination’s list to be nominated to the Court of Appeals three times in the past, in 2014, 2015, and most recently in 2016 when Judge Wilson was selected to replace Judge Shelia Abdus-Salaam. Justice Peradotto has served on the Appellate Division, Fourth Department since 2006, and is widely recognized for her work and service to the bench and bar. Most recently, Justice Peradotto was selected for the Erie County Bar Association’s Outstanding Jurist Award, and serves on the Chief Judge’s Working Group on the Future of the Bar Exam, among many other committees.
2. Caitlin Halligan, former Solicitor General of the State of New York
Ms. Halligan has also previously appeared on the nomination list three times. She served as New York’s Solicitor General from 2001 to 2007, and then, after a brief return to private practice, as General Counsel for the New York County District Attorney’s Office. She was also once nominated by President Barack Obama to fill a vacancy on the U.S. Court of Appeals for the District of Columbia Circuit, but she never received a confirmation vote in the U.S. Senate and she ultimate requested that her nomination be withdrawn. Ms. Halligan is now back in private practice, leading the appellate group at Selendy and Gay in Manhattan, and she is also currently serving on the Chief Judge’s Working Group on the Future of the Bar Exam.
The Other Possible Contenders
Governor Cuomo has shown that he has often likes to make “first in history” court appointments. In 2017, he nominated Judge Paul Feinman, who is the Court’s first openly gay Judge. Before Judge Feinman, Governor Cuomo nominated Judge Shelia Abdus-Salaam, the Court’s first African American woman to serve on the bench. This opportunity to further increase the Court’s diversity will not be lost on the Governor. Indeed, as one commentator noted on Twitter last night, the Court has not yet had an Asian American Judge:
And there is a very good candidate currently serving on the First Department.
3. Hon. Jeffrey Oing, Associate Justice, Appellate Division, First Department
Justice Oing has served on the First Department since 2017, was the first Asian American judge appointed to New York County’s Commercial Division, and served on the trial bench for 14 years before his elevation to the Appellate Division. Justice Oing also served as Deputy General Counsel for New York City, handing matters involving the City Council, and has been roundly recognized as an excellent jurist.
We will learn a lot about the upcoming nomination in the next few months, but I for one wouldn’t be surprised to see one of these three to be the pick.
In addition to leave grants from Appellate Division orders, the Court of Appeals also at times receives requests from the federal circuit courts and other state supreme courts to weigh in on issues of New York law pending in cases out of state. In particular, Court of Appeals rule 500.27(a) provides:
The cases are heard on an expedited basis, with the whole appeal from acceptance of the certified question to the Court of Appeals’ decision usually taking only about 9 months.
In a normal year, the Court of Appeals generally accepts and decides 3-4 certified questions. In 2019, for example, the Court decided 3 certified questions, 2 accepted in 2018 and 1 accepted in 2019. The Court had also accepted 2 other certified questions in 2019 that hadn’t yet been decided by the end of the year. In 2018, the Court decided 2 certified questions, and in 2017, it decided 6 certified questions.
Here are a few of the cases that the Court of Appeals has been asked to hear this year:
CIT Bank N.A. v Pamela Schiffman, U.S. Court of Appeals for the Second Circuit,January 28, 2020
(1) Where a foreclosure plaintiff seeks to establish compliance with RPAPL § 1304 through proof of a standard office mailing procedure, and the defendant both denies receipt and seeks to rebut the presumption of receipt by showing that the mailing procedure was not followed, what showing must the defendant make to render inadequate the plaintiff’s proof of compliance with § 1304?
(2) Where there are multiple borrowers on a single loan, does RPAPL § 1306 require that a lender’s filing include information about all borrowers, or does § 1306 require only that a lender’s filing include information about one borrower?
Simmons v Trans Express Inc., U.S. Court of Appeals for the Second Circuit,April 13, 2020
Under New York City Civil Court Act § 1808, what issue preclusion, claim preclusion, and/or res judicata effects, if any, does a small claims court’s prior judgment have on subsequent actions brought in other courts involving the same facts, issues, and/or parties? In particular, where a small claims court has rendered a judgment on a claim, does Section 1808 preclude a subsequent action involving a claim arising from the same transaction, occurrence, or employment relationship?
Ortiz v Ciox Health LLC, U.S. Court of Appeals for the Second Circuit, June 5, 2020
Does Section 18(2)(e) of the New York Public Health Law provide a private right of action for damages when a medical provider violates the provision limiting the reasonable charge for paper copies of medical records to $0.75 per page?
Adar Bays, LLC v GeneSYS ID, Inc., U.S. Court of Appeals for the Second Circuit, June 11, 2020
(1) Whether a stock conversion option that permits a lender, in its sole discretion, to convert any outstanding balance to shares of stock at a fixed discount should be treated as interest for the purpose of determining whether the transaction violates N.Y. Penal Law § 190.40, the criminal usury law.
(2) If the interest charged on a loan is determined to be criminally usurious under N.Y. Penal Law § 190.40, whether the contract is void ab initio pursuant to N.Y. Gen. Oblig. Law § 5-511.
Fast Trak Investment Company, LLC v Sax, U.S. Court of Appeals for the Ninth Circuit, June 11, 2020
(1) Whether a litigation financing agreement may qualify as a “loan” or a “cover for usury” where the obligation of repayment arises not only upon and from the client’s recovery of proceeds from such litigation but also upon and from the attorney’s fees the client’s lawyer may recover in unrelated litigation?
(2) If so, what are the appropriate consequences, if any, for the obligor to the party who financed the litigation, under agreements that are so qualified?
Ferreira v City of Binghamton, U.S. Court of Appeals for the Second Circuit,September 23, 2020
Does the “special duty” requirement—that, to sustain liability in negligence against a municipality, the plaintiff must show that the duty breached is greater than that owed to the public generally—apply to claims of injury inflicted through municipal negligence, or does it apply only when the municipality’s negligence lies in its failure to protect the plaintiff from an injury inflicted other than by a municipal employee?
Unfortunately, one of the measures that Chief Administrative Judge Lawrence Marks and the courts chose to make up for the 10% budget reduction was to deny 46 judges recertification to the bench after they reached the state’s mandatory retirement age of 70.
Under Judiciary Law 114 and 115, judges of the Court of Appeals and Supreme Court (including both the Appellate Division and the trial bench) may apply to be recertified to the Supreme Court bench after they retire for up to 3 terms of 2 years each. So, a judge who reaches the age of 70 may continue to serve either on the Appellate Division or the trial bench after their mandatory retirement until they reach the age of 76, if the court system finds that they “has the mental and physical capacity to perform the duties of such office and (b) that [their] services are necessary to expedite the business of the supreme court” (Judiciary Law 114 ; id. 115 ).
Recertification of retired judges is fairly routine. For example, once Court of Appeals Associate Judge Eugene Pigott reached mandatory retirement age and was forced off the Court of Appeals bench, he applied for and was granted recertification as a trial court judge in Erie County. Although routine, recertification is not guaranteed, however. The decision lies in the discretion of the Administrative Board of the Courts.
To make up part of the $300 million budget cut that Governor Cuomo has forced on the court system, Judge Marks announced that 46 judges would not be certified to the bench for terms beginning January 1, 2021, including 7 Justices of the Appellate Division. The First Department will be losing 2 Justices (David Friedman and Ellen Gesmer). The Second Department will lose 4 (Jeffrey Cohen, John Leventhal, Joseph Maltese, and Sheri Roman). And Justice Eugene Devine will leave the Third Department.
Only 3 judges were granted recertification notwithstanding the budget cuts: (1) Appellate Division, First Department Administrative Judge Angela Mazzarelli, who serves on “a number of task forces and commissions such as the State Commission on Judicial Conduct,” according to the court system spokesperson; (2) Appellate Term, First Department Justice Carol Edmead; and (3) Appellate Term, Second Department Administrative Judge Jerry Garguilo.
The budget cuts will certainly take a toll on the court system, but especially the Appellate Division, Second Department, which is already trying to reduce its large backlog of pending undecided appeals, and now loses 4 Justices from the court. Although this was likely unavoidable due to the unprecedented circumstances that the state and court system now face, it’s still troubling if it only further delays the resolution of pending appeals. For as they say, “justice delayed is justice denied.”
The second half of the Court of Appeals’ 2019-2020 term was certainly eventful, with the pandemic looming largest of all. In mid-March, New York shut down in response to COVID-19 and the Court of Appeals shut down with it. Arguments that were scheduled for the spring argument terms were either held virtually, rescheduled, or submitted on the briefs. And the Court’s decisions to grant leave to appeal in new cases took a hit too. Here’s a quick look at the new cases in which the Court of Appeals granted leave, from the beginning of the January Session to the end of June Decision Days last month.
Himmelstein, McConnell, Gribben, Donoghue & Joseph, LLP v Matthew Bender & Company, Inc., 172 AD3d 405 (1st Dept 2019)
Issue presented: May a consumer state a cause of action under General Business Law § 349 where the only injury alleged to have resulted from the defendant’s allegedly deceptive business practices is the amount that the consumer paid for the product?
Holding below: Supreme Court, New York County, granted the defendant’s motion to dismiss the complaint because the increased price of a product is not a cognizable injury under section 349. The Appellate Division, First Department affirmed.
Issue presented: Does a mortgage holder’s execution of a stipulation to discontinue a prior foreclosure action constitute an affirmative act to revoke the holder’s election to accelerate the mortgage, and thereby render a subsequent foreclosure action timely?
Holding below: Supreme Court, Queens County, denied the motion of defendant Naidu to dismiss the complaint insofar as asserted against him as time-barred and granted those branches of the plaintiff’s cross motion for summary judgment on the complaint insofar as asserted against defendant Naidu and for an order of reference. The Appellate Division, Second Department, however, reversed the orders, granted the motion of defendant Naidu to dismiss the complaint insofar as asserted against him as time-barred, and denied as academic those branches of plaintiff’s cross motion for summary judgment on the complaint as asserted against defendant Naidu and for an order of reference. The Second Department held that the stipulation to discontinue the prior foreclosure action did not affirmatively revoke the acceleration of the mortgage because it “was silent on the issue of the revocation of the election to accelerate, and did not otherwise indicate that the plaintiff would accept installment payments from the [defendant].”
Vargas v Deutsche Bank National Trust Company, 168 AD3d 630 (1st Dept 2019)
Issue presented: Did a letter from the mortgage holder’s predecessor-in-interest, which informed the plaintiff that the mortgage debt would be accelerated if he failed to cure his default, accelerate the loan balance and commence the statute of limitations for a foreclosure action, and whether the discontinuance of a prior foreclosure action a sufficient affirmative act to revoke the acceleration?
Holding below: Supreme Court, New York County, upon renewal, denied mortgage holder’s motion to dismiss the complaint and granted the plaintiff’s cross motion for summary judgment declaring plaintiff’s property free and clear of all liens and encumbrances by defendant. The Appellate Division, First Department affirmed, holding that the mortgage holder “was time-barred from commencing a foreclosure action against plaintiff’s mortgaged property because more than six years had passed from the date that the debt on the mortgage was accelerated.” The letter showed a clear intent to accelerate the debt if not satisfied within a time certain, and the plaintiff did not cure the default.
Jean-Paul v 67-30 Dartmouth St. Owners Corp., 174 AD3d 870 (2d Dept 2019)
Issue presented: Does the dismissal of a Chapter 7 bankruptcy proceeding restore a debtor-plaintiff’s capacity or standing to pursue a personal injury action that the debtor-plaintiff failed to list as an asset during the bankruptcy proceeding?
Holding below: Supreme Court, Queens County, among other things, granted that branch of defendant’s motion which was for summary judgment dismissing the complaint because the failure of the debtor deprived her of capacity to pursue the personal injury action. The Appellate Division, Second Department affirmed.
Issue presented: Did a triable issue of fact exist as to the fault of the defendant driver when the car he was driving was struck in the right rear tire, causing the accident?
Holding below: Supreme Court, New York County, denied the motion of defendants Danny Budden, Clark Road Transport, Inc. and Ryder Truck Rental Canada for summary judgment dismissing the complaint as against them. The Appellate Division, First Department reversed and granted the motion for summary judgment, holding that photographic evidence demonstrated that they could not have been at fault. One Justice dissented, and would have held that triable issues of fact existed as to the parties’ respective liabilities.
J.P. Morgan Securities, Inc. v Vigilant Insurance Company, 166 AD3d 1 (1st Dept 2018)
Issue presented: Was the disgorgement payment made to the Securities and Exchange Commission an insurable loss?
Holding below: Supreme Court, New York County, awarded plaintiff judgment against certain defendants. The Appellate Division, First Department reversed, denied plaintiffs’ motion for summary judgment, granted defendants’ motion for summary judgment declaring that plaintiffs are not entitled to coverage for the disgorgement payment, and so declared.
Matter of Verneau v Consolidated Edison Co. of New York, Inc., 174 AD3d 1022 (3d Dept 2019)
Issue presented: Did liability for a workers’ compensation death claim transfer to the Special Fund for Reopened Cases under Workers’ Compensation Law 25-a?
Holding below: The Appellate Division, Third Department reversed a decision of the Workers’ Compensation Board, held that “the imposition of liability on the Special Fund in this case is not precluded by the . . . statutory amendment [to section 25-a], given that liability was transferred to the Special Fund in December 2011, well before the January 1, 2014 closure date,” and remitted to the Board for further proceedings. The Third Department held that the Court of Appeals’ decision in American Economy Ins. Co. v State of New York (30 NY3d 136 ) was not inconsistent, because “the Court did not specifically state or otherwise suggest that Workers’ Compensation Law § 25-a (1-a) applied to foreclose the Special Fund from continuing to be liable for consequential death claims arising where a decedent had an established workers’ compensation claim for which the Special Fund was already liable prior to January 1, 2014.”
Matter of Rexford v Gould Erectors & Riggers, Inc., 174 AD3d 1026 (3d Dept 2019)
Issue presented: Did liability for a workers’ compensation death claim transfer to the Special Fund for Reopened Cases under Workers’ Compensation Law 25-a?
Holding below: The Appellate Division, Third Department reversed a decision of the Workers’ Compensation Board, held that “the Special Fund is liable for claimant’s consequential death claim inasmuch as liability had been transferred to it in 1997, well before the January 1, 2014 closure date set forth in Workers’ Compensation Law § 25-a (1-a),” and remitted to the Board for further proceedings.
Sassi v Mobile Life Support Services, Inc., 176 AD3d 886 (2d Dept 2019)
Issue presented: Did the plaintiff sufficiently state a claim for employment discrimination under the New York State Human Rights Law?
Holding below: Supreme Court, Duchess County, granted the defendant’s motion to dismiss the complaint. The Appellate Division, Second Department affirmed.
Issue presented: Does the assumption of the risk doctrine preclude liability against a school district for an injury to an infant plaintiff playing on an irregular playing field?
Holding below: Supreme Court, Nassau County granted the motion of the defendant Merrick Union Free School District for summary judgment dismissing the complaint insofar as asserted against it based on the infant plaintiff’s assumption of the risk. The Appellate Division, Second Department affirmed.
And that’s it. Through the first four months of the 2019-2020 Court of Appeals term, the Court granted only 5 cases: 2 from the Second Department, 2 from the Third Department, and 1 from the First Department. Now, after the close of the term, the total is up to 16: 6 from the Second Department, 5 from the First Department, 5 from the Third Department, and none from the Fourth Department.
Only 16 leave grants in an entire year. That’s an incredibly low grant rate. But, unfortunately, it’s not out of the norm in recent years. Another new term starts in a few weeks, and as they say, there’s always next year!
Yesterday, Senator Joseph Addabo introduced a new bill that could provide a way around the Third Department’s holding that DFS is prohibited gambling and effectively moot the case before the Court of Appeals. A quick refresher: The New York Constitution bans “gambling,” but doesn’t define the term. The Third Department held that the Penal Law definition of what is prohibited gambling governs the extent of the constitutional ban. That is, the Constitution prohibits any games the outcome of which depend upon chance in a material degree, notwithstanding that they may also involve the players’ skill.
Here’s the way around. In addition to providing a new severability clause for the Interactive Fantasy Sports Law, the new proposed legislation would redefine the scope of gambling under the New York Penal Law to exclude daily fantasy sports.
By amending the Penal Law definition of gambling, the new proposed legislation would play right into the Third Department’s holding. If the scope of “gambling” under the Constitution is governed by the Penal Law, as the Third Department held, changing the Penal Law, as the Legislature has the power to do, would fix the constitutional problem (assuming you think there is one—I don’t).
Thus, if the bill is passed and signed into law before the Court of Appeals decides the appeal, it would effectively moot the constitutional challenge because the Court would have to apply the law as it stood at the time of its decision. Now, the Court would still have to agree with the Third Department’s determination that the scope of “gambling” under the Constitution is the same as the Penal Law definition, but that seems likely, given that the Penal Law definition was adopted in the first instance to implement the constitutional ban after it was adopted.
This is a very interesting development, and could have a huge impact on the appeal before the Court of Appeals. It’s definitely something to watch.
Whether it’s in response to the COVID-19 court closures, or it was just time to bring the Court more into the digital age, the Court of Appeals announced yesterday that it is amending its rules, effective May 27, 2020, to require parties to file digital copies of all civil motions and opposing papers to those motions, and jurisdictional inquiry responses, with the Court. Before this amendment, the Court’s rules had limited digital filings to the briefs and records filed on appeals.
As the Court’s notice to the bar explains, the digital filing does not actually constitute service or filing of the motion. That’s still governed by the CPLR and when the paper copy of the motion papers hits the counter in the Clerk’s Office and is stamped received. But the rule amendments provide that the parties have 7 days after the return date of the motion to upload their digital copies of the motion papers (but of course, you should do it as soon as possible after service—don’t wait if you don’t have to).
What’s most notable about this rule change to me is that the Court is significantly reducing the amount of printed paper copies of the motion papers that have to be filed (from 6 copies to 1), and eliminating entirely the requirement to file paper copies of the Appellate Division briefs and record that must normally accompany civil motions for leave to appeal. That’s an important step. Even the significant revisions to the Appellate Division’s rules in the fall of 2018 still required the parties to file 5 paper copies of the briefs and record. Now at the Court of Appeals, under these rule amendments, you can file your motion for leave with the original and only a single copy for the Court’s use.
Another change to note: under the Court’s rules, you used to have to serve your adversary with two copies of your motion for leave to appeal, and your affidavit of service needed to note specifically that two copies were served (I made the mistake of not noting that two copies were served one too many times, only to get a very nice reminder call from the motion’s clerk upon receipt). No longer. Now, only one copy of the motion needs to be served.
With these changes, here’s hoping that we can move ever closer to a fully digital filing system at both the Court of Appeals and the Appellate Division without the need to serve or submit the extra paper copies that go to sit in a file room somewhere in the basement of Court of Appeals Hall.
Although some attorneys whose appeals had been scheduled for the March or April/May session won’t get the chance to argue, because the Court will be taking a few previously calendared cases on submission (including an interesting—to me, at least—issue about whether a municipal defendant can exclude one of multiple claimants from a statutorily required pre-suit deposition), most cases from those sessions will be rescheduled for argument later. And the Court has chosen a limited number of cases for the first virtual argument session in the Court’s history in June. The arguments will be livestreamed, as always, so we’ll all get to see what the Judges’ homes or chambers look like (unless of course they’ve figured out how to work virtual backgrounds).
The Third and Fourth Department Expand Virtual Court Operations Too
Now the Court of Appeals and all four departments of the Appellate Division are hearing arguments virtually, and the work of our appellate courts can continue, even in these times where we’re all working from home.
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