Court of Appeals: Sorry, Judges. The State’s Contribution to Your Health Insurance is Not Part of Your Compensation

New York employees have pretty great health insurance options. Having left the State’s employ and its health insurance to move to the private sector and non-collectively bargained health insurance, believe me, I know. Premiums are low. Coverage is high. And the State covers a substantial part of the cost. So too for New York’s judges. They are state employees with access to New York’s health insurance plans, and the State too pays a significant portion of their health insurance premiums.

But in 2011, when the State was faced with a budget crisis, it negotiated with the State-employee unions to, among other things, reduce the percentage of health insurance premiums for which it was responsible. The deal avoided layoffs, so the unions agreed, and the Legislature thereafter adopted Civil Service Law § 167(8) to effectuate the reductions for nearly all State employees and retirees, including the State’s 1,200 judges. As a result of the amendment, the State’s percentage of the judges’ health insurance premium contribution was reduced from 90% to 84%.

Here’s the rub. To ensure that the State’s judges are protected from political influence by manipulation of their pay, Article VI, § 25 of the New York Constitution protects the judges’ compensation from diminishment. In particular, the Judges’ Compensation Clause provides that “the compensation of State sitting and retired judges: ‘shall be established by law and shall not be diminished during the term of office for which [a judge] was elected or appointed'” (Opn, at 5, quoting NY Const, art VI, § 25[a]). The term “compensation” isn’t defined in the Compensation Clause, however.

Seizing on the ambiguity, 13 sitting and retired judges and a few associations of judges challenged the reduction of the State’s health insurance premium contributions, arguing that it violated the Compensation Clause by reducing the judges’ total compensations, which they read broadly to include all salary and benefits paid by the State.

Supreme Court, New York County agreed, and declared Civil Service Law § 167(8) and its implementing regulations unconstitutional as applied to the State’s judges. Particularly, the Court held, the First Department had previously taken a broad view of the term “compensation” to include both wages and benefits. The Court also found persuasive a case from the New Jersey Supreme Court, where that court held that a similar diminution in the compensation of New Jersey judges violated the New Jersey Constitution.

Because the only question involved in the case was the constitutionality of Civil Service Law § 167(8) under the Compensation Clause, the State used a rarely invoked provision of the Court of Appeals’ jurisdiction to appeal directly from the Supreme Court judgment to the Court of Appeals. CPLR 5601(b)(2) provides that “[a]n appeal may be taken to the court of appeals as of right . . . from a judgment of a court of record of original instance which finally determines an action where the only question involved on the appeal is the validity of a statutory provision of the state . . . under the constitution of the state.” This is a very limited right to appeal, but the majority felt that it fit in this case.

On appeal in Bransten v State of New York (No. 67), the Court of Appeals held that under the Compensation Clause, protected judicial “compensation” includes only “a judge’s salary and any additional monies that serve as a permanent remuneration for costs necessarily incurred in fulfillment of a judge’s judicial obligations” (Opn, at 7). From the Court’s prior case law on the topic, the Court gleaned two essential features of protected compensation: “the remunerative purpose and the permanence of the legislative allotment” (Opn, at 8). The health insurance premiums, the majority held, fit under neither of these criteria.

Indeed, if the health insurance premiums were included as compensation, all benefits, even the most trivial like parking privileges, could be viewed as protected. Those benefits are not what the Constitution intended to protect when it sought to free the judiciary from political meddling. Therefore, the majority held,

While the reduction in the State’s contributions to the costs of health insurance premiums would increase a participating judge’s share of the cost associated with the chosen health care plan, such an increase is not the equivalent of a direct reduction in judicial compensation. It is a cost that is voluntarily assumed by the participating judges, and affects salary only indirectly as the judge must make up the difference.

Justice Dillon, sitting by designation from the Second Department, concurred in the reversal of the Supreme Court judgment, but for a starkly different reason. He reasoned that the term “compensation” should be read broadly to include the health insurance premiums, but would have held that the plaintiffs failed their burden to establish entitlement to judgment as a matter of law regardless. As Justice Dillon explained, given the presumption of constitutionality to which state statutes are entitled, the Plaintiffs failed to submit any evidence that the State would actually be paying less money overall to judges. A violation of the Compensation Clause, he reasoned, requires a showing that total compensation will be diminished, not just that the percentage that the State pays for health insurance premiums will be reduced. In fact, Justice Dillon noted,

If, for instance, the State’s contributions toward health care insurance premiums increase in a relevant year by a dollar amount that exceeds the value of the State’s 6% reduction in contributions for jurists or the 2% reduction for retirees, the judiciary, rather than suffering a diminution of overall compensation, may arguably come out “ahead” in the equation. In other words, the 6% or 2% contribution reductions toward premiums, as authorized by Civil Service Law § 167(8), do not necessarily and mathematically reduce the value of the insurance payments provided by the State, like a see-saw, without additional evidence that insurance payments by the State have not independently risen by 6% or 2% or more, if at all.

Judge Wilson, continuing his trend as the judge most focused on the intricate matters of the Court’s jurisdiction, objected to the Court’s taking the case on direct appeal from Supreme Court. As Judge Wilson saw it, the potential diminution in the judges’ compensation came not from Civil Service Law § 167(8), but from its implementing regulations. Section 167(8) was just a grant of authority to adopt regulations, which did not itself cause any diminution in judicial compensation. Because the plaintiffs never challenged the implementing regulations, and CPLR 5601(b)(2) only authorizes a direct appeal for constitutional questions of “the validity of a statutory provision of the state,” not for challenges to regulations, Judge Wilson would have declined to take the case.

In the end, the Court of Appeals has now limited the scope of the Judicial Compensation Clause and provided a specific definition of what constitutes protected judicial “compensation” under the New York Constitution. Although it’s an interesting issue, it certainly doesn’t seem like one that will come up much more in the future, save for maybe the jurisdictional point.  For as Judge Wilson put it, “our decision today creates an amorphous jurisdictional portal, which may open for others in the future” (Wilson, J., concurring, at 2-3). We shall see.

The Court of Appeals’ opinion can be found here.



Court of Appeals Answers Second Circuit Certified Questions in World Trade Center Cleanup Suit Against Battery Park City Authority

After the 9/11 terrorist attack, first responders and volunteers spent weeks/months/years cleaning up the City from the debris and dust left after the World Trade Center towers fell. A few of the buildings that were cleaned up were owned by the Battery Park  City Authority, a public benefit corporation created by the Legislature to spur economic redevelopment in Battery Park. When the workers doing the cleanup began to fall ill because of the cleanup of toxic dust, they brought personal injury claims against the BPCA in federal court for negligence and violations of NY Labor Law §§ 200 and 241(6) for failing to provide a safe workplace.

The plaintiffs’ claims were dismissed on July 29, 2009, however, for failure to timely serve a notice of claim pursuant to the Public Authorities Law. Afterwards, the New York Legislature enacted “Jimmy Nolan’s Law,” which revived the time-barred claims against the BPCA and provided the plaintiffs with an additional year to serve the notices of claim. The eight plaintiffs then took advantage of the new law and sued BPCA again. BPCA moved for summary judgment dismissing the claims and challenging the constitutionality of Jimmy Nolan’s Law on due process grounds. The State intervened in defense of the statute and argued that BPCA, as a public benefit corporation, lacks capacity to challenge the constitutionality of the state statute.

As I previewed in more depth here, New York generally follows the traditional rule that municipalities and other arms of the State lack capacity to challenge the acts of the State as their creator, including state legislation. BPCA argued, however, that as a public benefit corporation it is different. Under the Court of Appeals’ decision in Clark-Fitzpatrick, Inc. v Long Is. R.R. Co. (70 NY2d 382, 387 [1987]), BPCA argued, “a particularized inquiry is necessary to determine whether—for the specific purpose at issue—the public benefit corporation should be treated like the State.”

The District Court (SDNY) held that the BPCA is an entity independent of the State because it “was created to be independent of the State in performing primarily private functions, funded primarily by private means,” through issuance of bonds (Matter of World Trade Ctr. Lower Manhattan Disaster Site Litig., 66 F Supp 3d 466, 472 [SDNY 2014]). Thus, the District Court concluded that BPCA had capacity to challenge the statute on due process grounds, and held that Jimmy Nolan’s Law violated the BPCA’s due process rights under the New York Constitution (see id. at 476).

On appeal, the Second Circuit did not find New York law on whether a public benefit corporation has capacity to challenge a state statute on constitutional grounds to be so clear. Instead, the Second Circuit held, it is “unclear whether New York courts have applied the [Clark-Fitzpatrick] particularized-inquiry test in the present context—that is, to determine whether a public benefit corporation should be treated like the State for the purpose of having the capacity to raise a constitutional challenge to a State statute” (Matter of World Trade Ctr. Lower Manhattan Disaster Site Litig., 846 F3d 58, 64 [2d Cir 2017]).

So, the Second Circuit certified two questions to the Court of Appeals:

(1) Before New York State’s capacity-to-sue doctrine may be applied to determine whether a State-created public benefit corporation has the capacity to challenge a State statute, must it first be determined whether the public benefit corporation “should be treated like the State,” see Clark–Fitzpatrick, Inc. v. Long Island R.R. Co., [70 N.Y.2d 382, 521 N.Y.S.2d 653] 516 N.E.2d 190, 192 ([ ]1987), based on a “particularized inquiry into the nature of the instrumentality and the statute claimed to be applicable to it,” see John Grace & Co. v. State Univ. Constr. Fund, [44 N.Y.2d 84, 404 N.Y.S.2d 316] 375 N.E.2d 377, 379 ([ ]1978), and if so, what considerations are relevant to that inquiry?; and

(2) Does the “serious injustice” standard articulated in Gallewski v. H. Hentz & Co., [301 N.Y. 164] 93 N.E.2d 620 ([ ]1950), or the less stringent “reasonableness” standard articulated in Robinson v. Robins Dry Dock & Repair Co., [238 N.Y. 271] 144 N.E. 579 ([ ]1924), govern the merits of a due process challenge under the New York State Constitution to a claim-revival statute?

Answering those two certified questions in Matter of World Trade Center Lower Manhattan Disaster Site Litigation (Faltynowicz et al v Battery Park City Authority and two others) (No. 119), the Court of Appeals held that public benefit corporations are no different than any other arm of the State for purposes of capacity to challenge a state statute. Thus, they must fall within one of recognized exceptions to the general incapacity rule before they can bring such a claim, and “no ‘particularized inquiry’ is necessary to determine whether public benefit corporations should be treated like the State for purposes of capacity” (Opn, at 5).

Public benefit corporations, which are vehicles for funding public projects, the Court held, have two purposes: (1) to “protect the State from liability” and (2) to “enable public projects to be carried on free from restrictions otherwise applicable” if the State was the project sponsor. In that way, public benefit corporations have an existence separate from the State. That separate existence for those limited purposes, however, does not mean that public benefit corporations, as agents of the State, fall outside of New York’s general rule that subdivisions of the State lack capacity to challenge the acts of their creator on constitutional grounds. Indeed, the “particularized inquiry” test applied in Clark-Fitzpatrick applies only to public benefit corporations’ relationships with private parties, not to its relationship with the State. Thus, the Court held, “with few exceptions, [New York’s] capacity bar closes the courthouse doors to internal political disputes between the State and its subdivisions,” such as those in this case (Opn, at 9).

Reviewing the second certified question, the Court concluded that the “serious injustice” standard and the “reasonableness” standard aren’t really that different, although the different terminology has been used in prior precedent. Clarifying, therefore, what standard applies to the merits of a due process claim to a claim-revival statute, the Court held “a claim-revival statute will satisfy the Due Process Clause of the State Constitution if it was enacted as a reasonable response in order to remedy an injustice” (Opn, at 32). As the Court explained, under that standard, a claim-revival statute will be constitutional if there was “an identifiable injustice that moved the legislature to act” and “the legislature’s revival of the plaintiff’s claims for a limited period of time was reasonable in light of that injustice” (Opn, at 30-31). A higher standard of review would be too much, the Court held.

A more heightened standard would be too strict. In the context of a claim-revival statute, there is no principled way for a court to test whether a particular injustice is “serious” or whether a particular class of plaintiffs is blameless; such moral determinations are left to the elected branches of government. While we have traditionally expressed an aversion to retroactive legislation, of which claim-revival statutes are one species, we have noted that the modern cases reflect a less rigid view of the Legislature’s right to pass such legislation. Nonetheless, there must first be a judicial determination that the revival statute was a reasonable measure to address an injustice

(Opn, at 31-32 [cleaned up]).

Judges Rivera and Wilson wrote separately to expand on their views of the issues. Judge Rivera explained her view of the second certified question that “unless it impinges on a separate vested property right and not merely the hope of avoiding litigation, a claim-revival statute does not violate due process, because defendant has no fundamental right to a statute of limitations in perpetuity” (Rivera, J., concurring, at 9). And Judge Wilson argued, on the first certified question, that the question was not one of capacity at all. Plainly, he thought, the BPCA has capacity to bring a suit.  What it doesn’t have, Judge Wilson explained, is prudential standing that would make the question justiciable. Judge Wilson would have gone farther too, to offer for the Second Circuit a view of the case on the merits: BPCA loses.

With those questions answered, the case will proceed back to the Second Circuit for a decision on whether BPCA has capacity to challenge Jimmy Nolan’s Law (after the Court of Appeals decision, there is likely zero chance that it does) and whether BPCA’s due process claims will succeed on their merits (even if BPCA had capacity, its claims would still likely fail under the Court’s newly clarified standard). So, in all likelihood, the plaintiffs’ personal injury claims will proceed in District Court with BPCA on the hook for damages.

The Court of Appeals’ opinion can be found here.

Court of Appeals: When a Court Dismisses an Uncertified Class Action, Notice to Class Members is Mandatory

Today, I’m happy to present a guest post by Jared Cook (@jkimballcook on Twitter), an attorney with the Rochester firm Adams Bell Adams, PC. Jared’s practice focuses on civil appeals, construction contract disputes, employment law, civil rights, and class actions. Contact him at

A plaintiff files a complaint with class action allegations, but before he files a motion for class action certification, the parties settle and agree to dismiss the case. New York’s class action rules say that the court can’t dismiss a class action without sending notice to the class members. Does the court have to send notice to the class members, even though a class was never certified? In a four-to-three decision in Desrosiers v Perry Ellis Menswear, LLC (Nos. 121 and 122), the Court of Appeals says yes.

The debate between the majority and the dissent is sort of a classic statutory interpretation debate, pitting textual and policy arguments against arguments that infer legislative intent from legislative inaction in the face of contrary case law. But this case is perhaps unusual because it is the “textualist” dissent that argues policy, while the majority opinion tells the parties to address policy concerns to the legislature, not the courts.

The Majority Opinion

Judge Fahey’s opinion for the majority starts with the statutory text. CPLR 908 says that “[a] class action shall not be dismissed, discontinued, or compromised without the approval of the court.” But because the text neither explicitly limits itself to certified class actions nor explicitly states that it applies to uncertified class actions, the majority finds the text inconclusive. It therefore looks to extra-textual sources to find evidence that the legislature understands CPLR 908 to apply to uncertified class actions.

First, it looks to legislative history. It notes in particular that ABA committees opposed the legislation that would become CPLR 908, and suggested an amendment that would have required notice to the class only after certification, but that the legislature declined to adopt that suggestion.

Second, it looks to federal class action law, noting that CPLR 908 was modeled on then-current federal rule 23(e). Most federal courts of appeal that had addressed the issue at the time that article 9 was enacted held that the notice provisions applied before certification as well as after certification.

Third, the majority looks to legislative inaction. It notes that even though the legislature did amend article 9 on other issues, the legislature made no effort to correct the First Department’s 1982 decision in Avena v Ford Motor Co. (85 AD2d 149 [1st Dept 1982]), which held that notice was mandatory before certification. Nor did it act to bring CPLR 908 into conformity with federal class action law after Congress amended Rule 23(e) in 2003 to require notice only for post-certification dismissals. Based on all this, the majority concludes that the legislature’s understanding of CPLR 908 is that it applies to uncertified class actions as well as certified class actions.

Finally, the majority dismisses policy-based arguments against applying CPLR 908 to uncertified classes, stating that such issues should be addressed to the legislature.

The Dissent

But while the majority sees it as a question of whether uncertified classes are an exception from CPLR 908, the dissent sees it as a question of whether an uncertified class action is even really class action at all. The dissent argues that the term “class action” can only mean “certified class action,” because a “class action” cannot exist until the court adjudges it to satisfy the class action prerequisites set out in article 9. The dissent thus finds fault with the majority’s conclusion that the statutory text is ambiguous in the first place.

The dissent then makes a doctrinal argument that it is a basic principle of class action law that no court can order relief for class members without an order certifying a class and giving notice to class members, and that an order giving notice to members of an uncertified class violates this principle because it provides them with a form of relief. It then makes three related practical policy arguments: first, that a pre-certification notice is meaningless because all it does it tell class members that another person’s claim is being settled by a private agreement that they are not party to and that does not affect their rights; second, that without a class certification order, it will be difficult to even know who the class members are; and third the effect of notice is to essentially identify more clients for the plaintiff’s attorneys at the expense of the court and the defendants.

Finally, the dissent attacks the Avena decision itself. It notes that Avena rests on the idea that class representatives and class counsel have fiduciary duties to absent class members, but the dissent questions whether those fiduciary duties do in fact exist before certification, and notes that Avena cited nothing to support that point. It also attacks the majority’s reliance on federal law, because even under the former Rule 23(e), federal courts held that pre-certification notice was discretionary, not mandatory.


Personally, I think the dissent’s reading is more natural in the context of article 9, but I’m not convinced that it’s entirely free from ambiguity—even Judge Stein has to add words to the statute to make his reading unambiguous: he draws a distinction between “purported class actions” (i.e. uncertified classes) and “actual class actions”(i.e. certified class actions). I’m also not entirely convinced by the dissent’s doctrinal/policy arguments. Sure, courts don’t normally order relief for members of classes that don’t get certified, but that doesn’t mean that members of uncertified classes get no relief from class actions. The statute of limitations is normally tolled on the claims of members of a class from the moment the complaint is filed, and putative class members get the benefit of that toll even though the class isn’t yet certified. It isn’t “meaningless” to be informed that you may have a claim on which the statute of limitations is now running. And the concern about identifying class members is always an issue—even in certified classes. A class definition doesn’t become self-executing just because it’s in a class certification order rather than in a complaint. My gut says that the dissent’s third policy argument is what’s really driving the decision: it finds the idea of class action attorneys being able to find new clients from the class notice to just be unseemly.

So what are the practical implications of this decision?

Well, requiring notice to class members even before certification makes pre-certification settlements more expensive and slower. It also makes them more risky: even if the parties do settle the class representative’s claims, an employer or other class action defendant is more likely to face the same class action rebooted a new class representative recruited from the other putative class members who have been notified of the dismissal. This could discourage class action defendants from early settlement with class representatives, but at the same time it may actually encourage class-wide settlement by making it less attractive to simply pick off the lead plaintiff, based on a gamble that the plaintiffs’ attorneys won’t be able to find another class member to pick up the fallen spear and continue the fight. If the employer has to go through notice to class members anyway—and thus risk provoking another class member to become a new class representative, the employer might as well get a release of the class-members’ claims.

On the other hand, this decision might encourage plaintiffs to accept early individual settlements. A class representative and her counsel may often have to choose between a good individual settlement offer and pursuing classwide relief. If the attorneys are serious about pursuing a class action, this can create tension between the interests of the class and the interests of the class representative. Requiring notice to class members buys the class a measure of insurance by making it more likely that the attorneys may be able to find a new class representative. This rule may thus free class action attorneys and plaintiffs to accept attractive individual settlements without entirely giving up forever on classwide relief.

But if plaintiff’s attorneys are not serious about pursuing a class action, this rule should make them think carefully about the decision to include class action allegations in the first place. It may sometimes be tempting for plaintiffs’ attorneys to include class action allegations as a bargaining chip to leverage settlement of an individual plaintiff’s claims. After all, it usually costs nothing to include allegations that you can agree to dismiss later. But with this rule, class action allegations cannot simply be dismissed to sweeten the deal, and the extra cost, time, and publicity of mandatory notice may actually make quick individual settlement harder, not easier. So this decision may discourage class action complaints in borderline cases.

One unanswered question this decision leaves is whether there are other ways to get around CPLR 908. Could attorneys trying to craft a settlement without notice avoid CPLR 908 by jointly moving to strike the class action allegations from a complaint, or to file an amended complaint without class action allegations? My gut says probably not, but from a strict textualist point of view, there’s at least an argument that striking class action allegations or removing them by amending the complaint is not “dismiss[ing], discontinue[ing], or compromise[ing]” a class action, but simply rendering it not a class action, thus leaving it free to be “dismissed, discontinued, or compromised” without class notice. Of course, if this decision stands for the principle, contrary to the dissent’s intuition, that class action attorneys have fiduciary duties to absent class members from the moment they file the complaint, rather than from the moment of class certification, a court could view that kind of creative tactic as a violation of that fiduciary duty.

The Court of Appeals’ opinion can be found here.

Court of Appeals Holds Reinsurance Agreements Must Be Interpreted Like Any Other Contract

Reinsurance is insurance for insurers. Big money insurers often seek to defray their risk by paying a reinsurer to cover some of their liability for big payouts. For example, if an insurer issues a $10 million business policy, a reinsurance policy might cover half of that. So if a $10 million claim is paid by the insurer, the reinsurer would reimburse the insurer for $5 million of the cost.

The question is, though, if the reinsurer’s liability is capped at $5 million, does that cap automatically include litigation defense costs as a matter of New York law? In Excess Insurance Co. Ltd. v Factory Mutual Insurance Co. (3 NY3d 577 [2004]), the Court of Appeals interpreted a facultative reinsurance policy (reinsurance of a single insurance policy) to hold that the parties had agreed to limit the reinsurer’s total liability, including defense costs, to the stated limit. The Excess decision was based on the terms of the specific reinsurance policy the Court interpreted, but it has been interpreted by other courts as a holding that under New York law, all reinsurance agreement liability limits include not only losses under the insurance policy, but also all defense costs.

In Global Reinsurance Corporation of America v Century Indemnity Co. (No. 124), which I previewed here, the Court of Appeals was asked to clarify the scope of its decision in Excess. In Global, Global issued reinsurance certificates to Century to reinsure insurance policies that Century had issued to Caterpillar Tractor Company.  After Caterpillar was sued in numerous cases relating to alleged exposure to asbestos in Caterpillar’s products, Century was obligated to pay for Caterpillar’s defense expenses in addition to paying up to the liability limits of its policies. Global and Century then began to fight over the extent of Global’s liability under the reinsurance certificates.

The U.S. District Court for the Southern District of New York adopted Global’s interpretation of the reinsurance certificates that its total liability cap included defense costs. See Glob. Reins. Corp. ofAm. v. Century Indem. Co., No. 13 Civ. 06577, 2014 WL 4054260, at *4‐7 (S.D.N.Y. Aug. 15, 2014).

Noting that the Court of Appeals had not explicitly spoken on this issue, the Second Circuit certified the question to the Court of Appeals, asking whether the Court’s decision in Excess imposed a presumption or a rule of construction that would always include defense costs within a total reinsurance cap.

The Court of Appeals cleared up the confusion over its Excess decision, holding that reinsurance agreements should be interpreted like any other contract. Excess did not impose any presumption that defense costs are always included in a total reinsurance liability cap. That question will depend on the particular terms of the agreement. As the Court put it,

The foregoing principles do not permit a court to disregard the precise terminology that the parties used and simply assume, based on its own familiar notions of economic efficiency, that any clause bearing the generic marker of a “limitation on liability” or “reinsurance accepted” clause was intended to be cost-inclusive. Therefore, New York law does not impose either a rule, or a presumption, that a limitation on liability clause necessarily caps all obligations owed by a reinsurer, such as defense costs, without regard for the specific language employed therein.

That makes sense. A reinsurance policy is like any other contract. The parties can bargain for particular terms and their intentions should control. If there’s one lesson to come out of the Court’s decision in Global, it’s to make sure that your reinsurance policy is very clear about what is included in any total liability cap. If defense costs are capped too, then say that in plain language. Otherwise, you too could be spending boatloads of money litigating over whether a few words in the agreement mean that the reinsurer has unlimited liability for defense costs, even over and above the total liability cap. And that’s no fun at all (except for the attorneys).

The Court of Appeals’ opinion can be found here.

Court of Appeals Declines to Up the Standards for SEQRA Review

The State Environmental Quality Review Act requires that agencies, municipalities, and local boards that have power to approve or fund projects study the potential adverse environmental impacts of a proposal before they approve it. This makes sense. If a project is going to have adverse environmental consequences for a community, the agency approving it should know that beforehand and factor those consequences and what can be done to mitigate them into its decision. As the Court of Appeals put it, SEQRA “represents an attempt to strike a balance between social and economic goals and concerns about the environment—defined broadly to include ‘land, air, water, minerals, flora, fauna, noise, objects of historic or aesthetic significance, existing patterns of population concentration, distribution, or growth, and existing community or neighborhood character'” (Matter of Jackson v New York State Urban Dev. Corp., 67 NY2d 400, 414 [1986]).

Because this balance is very fact intensive, and differs with every proposal, substantial discretion is left with the agency that conducts the SEQRA review to determine what potential impacts need to be looked at closely, what alternatives should be considered, and what mitigation measures should be imposed.  Judicial review of these decisions is limited. A rule of reason is applied to the agency’s determinations, and they will be upheld so long as the agency has reasonably identified the potential adverse environmental impacts that the project might have, taken a “hard look” at those impacts, and set forth its determination whether the impacts will be significant in a writing based on the agency’s findings.

In Matter of The Friends of P.S. 163, Inc. v Jewish Home Lifecare, Manhattan (No. 128), which I previewed here, the New York State Department of Health reviewed and approved a 20-story nursing home that will be built on the Upper West Side of Manhattan next to P.S. 163, an elementary school with about 600 students between the ages of 3 and 11. During the SEQRA review, DOH identified that the construction could potentially cause noise and toxic dust exposure issues, but concluded that the mitigation measures that were selected would ensure that the exposure would not exceed federally acceptable levels.

Parents’ groups, however, argued that wasn’t enough.  They claimed that DOH’s SEQRA review didn’t take a hard enough look at the noise and toxic dust impacts and that the mitigation measures weren’t enough to protect the students next door. Supreme Court, New York County agreed and annulled the DOH approval. The Court held that DOH “did not address the particular adverse effects of elevated noise levels on children’s learning abilities or performance in school,” nor “take a sufficiently hard look at additional noise mitigation measures.”  The Court held that DOH did not take a hard enough look at the potential environmental impacts in light of the special concerns of having young elementary school students next door to the construction site.

The Appellate Division, First Department, however, reversed on a 3-1 vote. The Appellate Division held that a higher standard of environmental review doesn’t apply to this project because it is located next to a school.  DOH reasonably evaluated the noise impacts, the Court held, and was obligated only to evaluate and impose mitigation measures to the maximum extent practicable.  The best mitigation measures are not always required. Because DOH relied on the federal standards of exposure to determine whether the mitigation measures imposed would be adequate, the Court held that DOH complied with its obligations under SEQRA.

Although the Court of Appeals recognized the particular sensitivities of construction next to an elementary school, the Court declined to hold DOH to a higher standard of review. Particularly, the Court held, DOH, as the SEQRA lead agency, took the requisite hard look at the noise and dust impacts, and determined that they could be appropriately mitigated.

We disagree with petitioners’ lead claims, and, based on the record here, we conclude that DOH took the requisite hard look at the potential risk posed by soil-based lead contamination and potential lead dust migration. Petitioners’ claims that DOH’s soil-sample evidence was insufficient and resulted in unsupported conclusions about the risk posed by lead at the construction site are without merit. DOH relied on 38 soil samples, taken and analyzed according to a technically sound methodology by expert consultants. DOH weighed and resolved the disagreement voiced by the petitioners’ experts regarding the consultants’ methods and opinions. DOH’s conclusions are based on federal and state standards, including accepted EPA standards, on which the agency was legally allowed to rely. Petitioners may have preferred DOH to adopt a different standard, but we cannot say DOH’s determination “was affected by an error of law or was arbitrary and capricious or an abuse of discretion” (Akpan, 75 NY2d at 570 [1990] [internal quotation marks omitted]).

Petitioners’ challenge to DOH’s assessment of lead dust is similarly unavailing. As the record establishes, DOH relied on detailed investigations by experts, and employed appropriate government standards in assessing the risk of airborne lead. The DEIS, FEIS, and Findings Statement all explicitly acknowledged and evaluated the risk that construction would disturb leaded soil, creating airborne lead dust. In assessing how acute a danger the lead dust posed, DOH directly relied on the federal NAAQS for lead exposure, which was a rational choice, particularly as this standard was specifically formulated to protect sensitive populations, like schoolchildren.

Preventing the migration and inhalation of lead dust was one of the environmental risks the agency specifically set out to measure and mitigate in the RAP and CHASP that it adopted. In recognition of the risk, DOH imposed a battery of construction protocols to monitor and contain airborne dust. DOH reasonably concluded that these mitigation measures were sufficient to ensure that airborne lead levels remained within acceptable NAAQS limits, and explained its assessment fully in the DEIS and FEIS.

(Opn, at 13-14).

Had the Court accepted Petitioners’ arguments that the detailed review that DOH undertook just wasn’t good enough, it basically would have re-written all of its SEQRA precedents over the last 40 or so years.  The fundamental premise of SEQRA review is that it is for the lead agency, not the courts, to consider the evidence of environmental impacts and determine how best to mitigate them to the maximum extent practicable.  As long as the agency’s choices are reasonable, the courts properly defer to the lead agency’s decisions. Thankfully, with this decision, the SEQRA treatise need not be rewritten.

The Court of Appeals’ opinion can be found here.


Court of Appeals Holds Trial Judges Must Give Cross-Racial Identification Jury Instruction in Almost Every Case

Let’s set the stage. You’re walking down the street at night on your way back from work. You’re approached by a stranger, about the same age but a different race. He asks you the time, and as you pull out your phone to respond, he snatches it, threatens you with a knife, and runs. The police bring you down to the station and you give them a description of your assailant. You then are asked to pick him out of a lineup. You are sort of unsure, but recognize him when the police tell all of men in the line up to ask you the time.

The defendant is charged with robbery and goes to trial. Because your phone is never found, your identification is the only evidence against him. At the charge conference, the defendant’s counsel argues that the Judge should give a cross-racial identification charge because you’re a different race from the defendant and it’s harder to identify people of a different race, he argues. The trial judge doesn’t buy it, and denies the request. The jury then convicts the defendant, and the Appellate Division, Second Department affirms.  This is the situation that the Court of Appeals faced in People v Boone (No. 55).

On appeal to the Court of Appeals, there was only one issue: in a case where there is an identification by a witness of a different race than the defendant, is the defendant entitled to a cross-racial identification jury instruction? When the majority opinion begins like this, you get a good sense of how it will end:

In light of the near consensus among cognitive and social psychologists that people have significantly greater difficulty in accurately identifying members of a different race than in accurately identifying members of their own race, the risk of wrongful convictions involving cross-racial identifications demands a new approach.

The majority spends pages of the opinion on how social science has decided that cross-racial identifications are not always the most reliable, and how misidentifications are a significant cause of wrongful convictions in this country.

Mistaken eyewitness identifications are “the single greatest cause of wrongful convictions in this country,” “responsible for more . . . wrongful convictions than all other causes combined.” Inaccurate identifications, especially misidentifications by a single eyewitness, play a role in the vast majority of post-conviction DNA-based exonerations in the United States. Indeed, a recent report by the National Academy of Sciences concluded that “at least one mistaken eyewitness identification was present in almost three-quarters” of DNA exonerations. According to amicus The Innocence Project, 71% of DNA exonerations nationally involve eyewitness misidentification. This Court has noted in recent years the prevalence of eyewitness misidentifications in wrongful convictions and the danger they pose to the truth- seeking function and integrity of our justice system.

Social scientists have found that the likelihood of misidentification is higher when an identification is cross-racial. Generally, people have significantly greater difficulty accurately identifying members of other races than members of their own race. According to a meta-analysis of 39 psychological studies of the phenomenon, participants were “1.56 times more likely to falsely identify a novel other-race face when compared with performance on own-race faces.” The phenomenon is known as the cross-race effect or own-race bias

(Opn, at 4-6 [citations omitted]).

The Court then contrasted the allegedly widely accepted social science with what a typical juror knows as he or she hears a criminal case.

There is, however, a significant disparity between what the psychological research shows and what uninstructed jurors believe. One study showed that only 47% of jurors were familiar with the cross-race effect. A survey of over 1,000 jurors in Washington, D.C., cited by amicus the American Psychological Association, found that “[a] large plurality of the survey respondents (48%) thought cross-race and same-race identifications are of equal reliability, and many of the other [survey] respondents either did not know or thought a cross-racial identification would be more reliable (11%). Only 36% of the survey respondents understand that a cross-racial identification may be less reliable.” These findings demonstrate that, while the cross-race effect is a matter of common sense and experience for some jurors, it is by no means a universal belief shared by all. The need for a charge on the cross-race effect is evident.

And so, the Court decided that a cross-racial identification jury instruction should be given in every case where identification of a different race defendant is an issue. Although the majority pays lip service to the idea that the trial court still retains discretion to decide when the charge should be given, the opinion makes it very clear that the answer to that question is in almost always. Indeed, the Court’s rule—the charge must be given in every case it’s requested “when identification is an issue in a criminal case and the identifying witness and defendant appear to be of different races”—so broad that its hard to imagine a case where the trial court can deny a request for the charge.

Now, after the Court’s opinion in Boone, trial judges should get familiar with this jury instruction because it certainly appears that they’ll be giving it a lot from now on:

(1) that the jury should consider whether there is a difference in race between the defendant and the witness who identified the defendant, and (2) that, if so, the jury should consider (a) that some people have greater difficulty in accurately identifying members of a different race than in accurately identifying members of their own race and (b) whether the difference in race affected the accuracy of the witness’s identification.

Judge Garcia, concurring in the result, pointed out the issues with the majority’s opinion making the cross-racial identification jury charge effectively mandatory. Although he agreed that the trial court should not have denied the cross-racial identification jury charge in Boone, he warned that the majority’s opinion took away the trial court’s typical discretion in this area without providing any guidance to the trial bench for when the charge can be denied. Judge Garcia recounts all of the ways that a trial judge can provide the proper context for the jury to consider identification evidence. Judges can admit expert evidence on identifications.  They can allow appropriate cross-examination. They may determine the charges that are warranted based on the evidence they heard during the trial. There are a number of safeguards that trial judges can use to ensure that the jury can appropriately weigh identification evidence based on the particular facts of each case, Judge Garcia explained. And having heard all of the evidence, the trial judges are the best situated to use their discretion to decide when a cross-racial identification jury charge is necessary.  There’s no reason to change that rule, Judge Garcia notes.

Judge Garcia then explains the root of the problem with the majority’s rule:

But the majority hedges. Seemingly aware of the countless implications accompanying a mandatory charge, the majority provides that trial courts may deny the charge where (1) the identifying witness and defendant do not “appear to be of different races,” or (2) the witness’s identification of the defendant is not “at issue” (majority op at 17).

On paper, those purported caveats remain undefined and unexplained. In practice, they are meaningless. As a result,charge on the cross-race effect” (majority op at 17 [emphasis added]), regardless of whether cross-racial identification issues are implicated at trial. Not only is this approach unprecedented — we do not mandate any other charge relating to identification evidence — it inhibits our trial courts in a manner that may frustrate jury deliberations.

In stripping trial courts of their discretion, the majority’s rule presumes that our trial courts are incapable of performing their “quintessential task[s]” (McKnight, 665 F3d 792). It also overcorrects: the rule requires a cross-racial identification charge to be given even where it is likely to confuse, distract, or mislead the jury. Mandating the charge — even in cases where it is misleading, irrelevant, or otherwise unwarranted — creates a substantial risk of juror confusion and serves only to hinder, rather than aid, the jury’s critical factfinding function. In this way, the majority’s overinclusive, mandatory-on-request approach needlessly undermines the reliability of valid identification evidence to the detriment of both victims and jurors.

Although I’m not a criminal lawyer, I tend to agree with Judge Garcia. The decision on when the evidence warrants a particular jury charge should be laid in the hands of the trial judge, the person who presided over the trial. The judge’s decision is still reviewable for abuse of discretion, and if the judge gets it wrong, the conviction can be reversed an a new trial ordered, as in Boone.

But I’m certainly open to persuasion on why I’m wrong.  Let me know if you disagree.

The Court of Appeals’ opinion can be found here.

Family Court Lacks Jurisdiction to Continue Placement of Child in Foster Care After Dismissal of Underlying Neglect Petition

Under the Family Law, the State has certain authority to seek to protect children in danger by removing them temporarily from their parents’ care. Placing a child in foster care is a heart-wrenching decision that under the law has to be based on what is in the best interests of the child. That decision, however, has to weigh competing rights. As former Chief Judge Kaye put it,

Parental rights are fundamental constitutional rights and cannot be lightly taken away.

In Matter of Jamie J. (No. 118), the Court of Appeals was asked to address when, if ever, Family Court may continue to exert jurisdiction over and continue a foster care placement after a Family Law neglect petition has been dismissed as without foundation.  In Jaime J., a week after Jaime was born, the Wayne County Department of Social Services requested that Family Court remove her from her mother’s care without first filing a neglect petition against the mother. Once a neglect petition was filed, more than a year went by before Family Court held a fact-finding hearing on DSS’s allegations of neglect.

After denying DSS’s last minute motion to amend the neglect petition, Family Court held the fact-finding hearing and found that DSS failed to establish neglect based on the evidence that had been presented. Family Court, therefore, dismissed the neglect petition.

Once the petition was dismissed, Family Court would regularly end Jaime J.’s temporary foster care placement and return her to her mother. But that didn’t happen. Instead, Family Court held a second permanency hearing at DSS’s insistence, which argued that Family Law Article 10-A gave the Court continuing jurisdiction over Jaime to continue her foster care placement even though the neglect petition had been dismissed.

Jaime’s mother strenuously objected to the Court’s refusal to release Jaime from foster care and to the second permanency hearing. To quicken review of her objection, the mother consented to Jaime’s continued foster care placement and appealed, arguing that the Family Court was divested of jurisdiction upon dismissal of the neglect petition. After the Appellate Division, Fourth Department affirmed the Family Court permanency order on a 3-2 vote, Jaime’s mother appealed as of right to the Court of Appeals.

The Court of Appeals, in a fairly straightforward decision, held that once a neglect petition that gave DSS the basis to place a child in foster care is dismissed, Family Court loses jurisdiction over the child and must return her to her parents. Article 10-A of the Family Law, which exists “to provide children placed out of their homes timely and effective judicial review that promotes permanency, safety and well-being in their lives” (Family Law § 1086), doesn’t give Family Court continuing jurisdiction to continue a foster placement and hold permanency hearings without a new neglect petition being filed by DSS, the Court held. The Court, therefore, rejected DSS’s

hyperliteral reading of section 1088, divorced from all context, to argue that Family Court’s pre-petition placement of Jamie J. under section 1022 triggered a continuing grant of jurisdiction that survives the eventual dismissal of the neglect petition. In other words, even if the Family Court removes a child who has not been neglected or abused, it has jurisdiction to continue that child’s placement in foster care until and unless it decides otherwise. Section 1088’s place in the overall statutory scheme, the legislative history of article 10-A, and the dictates of parents’ and children’s constitutional rights to remain together compel the opposite conclusion: Family Court’s jurisdiction terminates upon dismissal of the original neglect or abuse petition.

Indeed, the Court held, “adopting the DSS’s interpretation of section 1088 would permit a temporary order issued in an ex parte proceeding to provide an end-run around the protections of article 10.”

The Court held, in light of the importance of keeping families together, DSS shouldn’t have the right to keep a child away from her parents without first proving that they have neglected her under the terms of the Family Law. That’s what’s in the best interests of the child.

The Court of Appeals’ opinion can be found here.

Court of Appeals Holds One Attempt at Personal Service Enough to Permit Nail and Mail Under NYC Charter

Service of papers saying that you violated a local municipal law implicates important due process concerns. If a property owner doesn’t get notice that something at his or her property violates local zoning regulations, he or she won’t have an opportunity to contest the violation or try to work out a deal to fix it. You might be surprised how frequently that comes up.

In civil litigation, the CPLR requires that a party make reasonable efforts to personally serve the other side—at least three attempts to deliver the papers on different days and at different times—before the party can resort to nail and mail service. After those times trying personal service, the party can then nail a copy of the papers to the door of the house and mail a copy there too. But nail and mail is a last resort in civil litigation when other ways of service haven’t worked.

The same isn’t true under the New York City Charter, however. The Charter allows the Department of Buildings to serve notices of zoning violations by nail and mail, but only if “a reasonable attempt has been made to deliver such notice to a person in such premises upon whom service may be made as provided for by article three of the civil practice law and rules…” So, in Matter of Mestecky v City of New York (No. 120), which I previewed here, the question before the Court of Appeals was whether a “reasonable attempt” at personal service under the Charter is the same as what’s required under the CPLR.

In Mestecky, the DOB tried to serve a property owner with notices of violation for doing construction work without building permits by knocking on the door of the rental property, ringing the doorbell, and then nailing the notices to the door when no one answered. DOB also mailed three of the seven notices of violation to the property owner’s home address. The owner challenged the service as insufficient under the Charter, but an ALJ and the Appellate Division, First Department said the one attempt was enough to satisfy due process.

Interpreting the NYC Charter’s service requirement, the Court of Appeals held that the language was pretty clear. It says “a reasonable attempt” at personal service has to be made before nail and mail service can be used. “A reasonable attempt” is singular, not plural, the Court held, so the NYC Council’s intent wasn’t up for debate.

The Court, therefore, rejected the property owner’s argument that the City Charter’s service provision for zoning violations incorporated the CPLR’s reasonable efforts standard before nail and mail service can be used. Under the Charter, only one personal service attempt is necessary. And so, in this case, the City Department of Buildings did enough, and the zoning violations were sustained.

While Mestecky is an interesting case for us procedural nerds (service issues are always exciting), the Court was careful to limit the reach of its decision to NYC zoning violations. So, there won’t be much, if any, impact on service in litigation in the New York courts.

The Court of Appeals’ opinion can be found here.

Court of Appeals Holds Standard for Punitive Damages Under NYCHRL is Willful or Wanton Negligence, Recklessness, or Conscious Disregard

The New York City Human Rights Law provides strong protections against discrimination in all of its forms.  To strengthen those protections, the NYCHRL makes punitive damages available to a prevailing plaintiff.  Its text, however, doesn’t provide the standard that the courts should apply when determining whether the plaintiff should be awarded punitives.  That’s a problem. Without a standard, the courts are left to interpret the statute and case law to come up with what the plaintiff must prove to that he or she is entitled to the extra award of damages to punish the discriminatory conduct.  And when discrimination cases are brought in federal court under both federal and state anti-discrimination laws, District Court judges tend to apply the federal standard to state law when state law is unclear.  That’s exactly what happened here.

In Chauca v Abraham (No. 113), which I previewed here, Veronica Chauca worked as a physical therapy aid before she went out on an approved maternity leave.  Her employer, however, never let her come back to work after her maternity leave had ended.  She was just told that her services were no longer necessary, and was unceremoniously fired.  If that sounds like blatant pregnancy discrimination, you’re right, it does.  And that’s exactly what a federal jury found, awarding Chauca $65,500 in damages for lost compensation and pain and suffering.

The U.S. District Court for the Eastern District of New York, however, declined to charge the jury on punitive damages.  The Court held instead that although the NYCHRL calls for liberal construction of its provisions, Chauca had not shown that her employer had intentionally discriminated with “malice” or “reckless indifference.”  The Court, thus, in effect applied the Title VII standard for punitive damages to the NYCHRL.

Chauca appealed the damages award to the Second Circuit, arguing that the District Court had improperly applied Title VII’s punitive damages standard to her NYCHRL claims.  The Second Circuit acknowledged that its prior decision in Farias v Instructional Systems, Inc. (259 F3d 91 [2001]) on the issue required the District Court to apply the Title VII standard, but noted that its decision has been called into question in the years after it was handed down. Particularly, the New York City Council has twice amended the NYCHRL to ensure that it it broadly construed, regardless of how similar state and federal statutes are interpreted. That, the Second Circuit reasoned, suggested that the Title VII standard for punitive damages might not be the right one.

Because, however, the New York courts have not yet addressed the question of what is the standard for punitive damage awards under the NYCHRL, the Second Circuit certified the question to the Court of Appeals.  At oral argument, the plaintiff’s counsel argued that because the NYCHRL provides no explicit standard for an award of punitive damages, the New York City Council must have intended that punitives be granted in every case where the plaintiff can establish that he or she was discriminated against.

Predictably rejecting the Plaintiffs’ rule of punitive damages in every case, the Court of Appeals held, to be awarded punitive damages under the NYCHRL, the plaintiff has to satisfy the New York common law rule for punitive damages under Home Ins. Co. v American Home Prods. Corp. (75 NY2d 196, 203-204 [1990]).  That is, the plaintiff must show that the discriminating defendant’s conduct “amount[s] to willful or wanton negligence, or recklessness, or . . . there is ‘a conscious disregard of the rights of others or conduct so reckless as to amount to such disregard'” (Opn, at 2, quoting Home Insurance Co., 75 NY2d at 203-204).

Because the text of the NYCHRL did not provide this standard, the Court relied instead on the generally accepted common law meaning of punitive damages as a legal term of art.  This interpretation was best, the Court held, because the City Council chose the term “punitive damages” knowing that it already had a well defined common law meaning that needed no further explanation.  Simple and straight forward.

The Court declined Plaintiff’s invitation to equate the standard for a compensatory damages award with a punitive damages one. As the Court put it,

Punitive damages differ conceptually from compensatory damages and are intended to address “gross misbehavior” or conduct that “willfully and wantonly causes hurt to another” (Thoreson v Penthouse Int’l, 80 NY2d 490, 497 [1992]). Indeed, this Court has noted that “[n]ot only do [punitive damages] differ in purpose and nature from compensatory damages, but they may only be awarded for exceptional misconduct which transgresses mere negligence” (Sharapata v Town of Islip, 56 NY2d 332, 335 [1982]). Punitive damages represent punishment for wrongful conduct that goes beyond mere negligence and are warranted only where aggravating factors demonstrate an additional level of wrongful conduct (see Home Ins. Co., 75 NY2d at 203-204). Accordingly, there must be some heightened standard for such an award.

The Court also, however, rejected the defendants’ assertions that the District Court properly applied the Title VII standard for punitive damages.  Title VII’s standard for a punitive damages award—requiring “intentional discrimination . . . with malice or with reckless indifference to the . . . protected rights of an aggrieved individual” (Koldstadt v American Dental Assn., 527 US 526, 529-530 [1999])—was too strict in light of the City Council’s recent amendments to the NYCHRL to ensure liberal construction of its anti-discrimination provisions to provide the utmost protection to discrimination victims. In contrast to the Title VII standard for punitive damages, the New York common law approach

requires neither a showing of malice or awareness of the violation of a protected right, representing the lowest threshold, and the least stringent form, for the state of mind required to impose punitive damages. By implementing a lower degree of culpability and eschewing the knowledge requirement, applying this standard adheres to the City Council’s liberal construction mandate while remaining consistent with the language of the statute.

Moreover, NYCHRL violations, by their very nature, inflict serious harm “to both the persons directly involved and the social fabric of the city as a whole” (Rep of Comm on Gen Welfare, Local Law No. 85 [2005], 2005 NY City Legis Ann, at 537). The standard for punitive damages articulated in Home Insurance, while requiring an appropriate showing of heightened culpability for punitive damages consistent with the language of the provision at issue, is nevertheless properly reflective of the serious and destructive nature of the underlying discriminatory conduct and the goal of deterring “future reprehensible conduct” (Ross, 8 NY3d at 489). Furthermore, subjecting NYCHRL defendants to punitive damages under this standard encourages nondiscriminatory behavior and the development and application of appropriate employment criteria. In sum, this approach is the most liberal construction of the statute that is “reasonably possible” and furthers the purpose of the NYCHRL.

Although I won’t spend much time on Judge Rowan Wilson’s dissent, in which he adopts Plaintiff’s rule of an automatic punitive damages award upon a finding of liability because, he argues, it is the most liberal construction of the statute, I have to say that I am continually impressed by his writings.  I finished the majority opinion sure that the correct decision had been reached, but Judge Wilson’s dissent, with its pithy takedowns of the majority’s reasoning, left me with more doubt about the holding than I expected.  And although I’m not ultimately convinced, he certainly makes a compelling case for finding the other way.  It’s worth a read.

The Court of Appeals’ opinion can be found here.

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