Court of Appeals February Session: Arguments of Interest for February 8, 2018

The Court of Appeals’ February session continues on Thursday, February 8, 2018 with three cases on the argument docket (the Court’s case summaries can be found here).

The Court will hear arguments on the following issues: (1) whether in misappropriation of trade secrets cases, damages can be measured by the misappropriator’s costs avoided, and whether prejudgment interest may be awarded on those damages; (2) when during trial must a criminal defendant invoke the right to proceed pro se; and (3) whether a criminal defendant was improperly denied the right to proceed to trial pro se, but with stand by counsel, and whether the trial court improperly denied the defendant’s attempt to introduce psychiatric evidence to challenge the voluntariness of his Miranda waiver.

No. 26     E.J. Brooks Company, d/b/a TydenBrooks v Cambridge Security Seals

Manufacturing plastic security seals is apparently big business.  You know, those seals that are nearly impossible to get off a bottle without a knife but give you a measure of comfort that nobody tampered with your goods before you opened them.  Well, when your company makes those plastic security seals, and three employees steal your trade secrets to take to a competitor, you sue them for misappropriating your hard work and ingenuity.

That is exactly what happened in E.J. Brooks Co. v Cambridge Sec. Seals, and the plaintiff won at trial.  So, the federal district court ordered the defendants to pay back in damages the costs that they avoided by stealing the trade secrets instead of developing the plastic security seals on their own.  The Court, however, denied the plaintiff’s request for prejudgment interest under CPLR 5001, holding in essence that inclusion of prejudgment interest would be duplicative here because the jury awarded damages from the date of the misappropriation to the date of the verdict.

On appeal, the Second Circuit held that finding liability was easy, but the question of the proper amount of damages for the misappropriation was less so.  The Court explained that New York decisions appear to have authorized a number of different measures of damages in misappropriation of trade secrets cases, but never explicitly the costs avoided measure used by the disctrict court below. So, the Second Circuit decided to certify the question to the Court of Appeals to decide.


The Second Circuit also certified whether the typically mandatory award of prejudgment interest under CPLR 5001 still applies where the plaintiff has already been awarded damages for the entire prejudgment period and an additional award of prejudgment interest would be a windfall.

The Court of Appeals will now have to decide these two certified questions:


The Second Circuit’s opinion can be found here.

Court of Appeals February Session: Arguments of Interest for February 7, 2018

The Court of Appeals’ February Session continues on Wednesday, February 7, 2018, with four cases (three arguments) on the docket (the Court’s case summaries can be found here). The Court will hear arguments on the following issues: (1) whether a contract of insurance that provides it will cover as an additional insured any party that the insured has “agreed to add as an additional insured by written contract” requires a direct agreement between the insured and the intended additional insured, or whether a recital in a collateral agreement is sufficient; (2) whether the Civil Rights Law § 51 right to privacy protects against use of a person’s likeness in a video game; and (3) whether the People were entitled to a Frye hearing to challenge the scientific basis for a criminal defendant’s expert’s theory of the victim’s death where the theory was not novel (that the victim died of drowning after ingestion of five prescription drugs, instead of by strangulation).

No. 23     Gravano v Take-Two Interactive Software, Inc.
No. 24     Lohan v Take-Two Interactive Software, Inc.

Grand Theft Auto V is the latest in a popular series of the video games where the player controls one of several main characters in a mob family/drug cartel story that takes place in the fictional city of Los Santos, San Andreas.  After the game was released, Plaintiffs Lindsay Lohan and Karen Gravano (of the reality show Mob Wives) were upset at what they believed to be characters that depicted them in particular ways.  In 2014, they commenced suit against Take-Two Interactive Software, Inc., the video game’s creator, alleging that it misappropriated their likenesses and violated their rights to privacy under New York Civil Rights Law § 51.

Specifically, Lohan alleged that the Take-Two “used a look-alike model to evoke Lohan’s persona and image.  Further, Lohan argue[d] that defendants purposefully used Lohan’s bikini, shoulder-length blonde hair, jewelry, cell phone, and signature peace sign pose in one image, and used Lohan’s likeness in another image by appropriating facial features, body type, physical appearance, hair, hat, sunglasses, jean shorts, and loose white top.  Finally, Lohan argue[d] that defendants used her portraits and voice impersonation in a character that is introduced to the player in a side mission.”  Gravano v Take-Two interactive Software, Inc., 142 AD3d 776, 777 (1st Dept 2016) (internal quotation marks omitted).

Gravano similarly claimed that the GTA character “Andrea Bottino” mirrored “her image, portrait, voice, and likeness” and “use[d] the same phrases she uses; that the character’s father mirror[ed] Gravano’s own father; that the character’s story about moving out west to safe houses mirrored Gravano’s fear of being ripped out of her former life and being sent to Nebraska; that the character’s story about dealing with the character’s father cooperating with the state government [was] the same as Gravano dealing with the repercussions of her father’s cooperation; and that the character’s father not letting the character do a reality show is the same as Gravano’s father publicly decrying her doing a reality show.”  Id. at 776-777.

After Supreme Court denied Take-Two’s motions to dismiss, the Appellate Division, First Department reversed and dismissed the complaints in their entirety.  The Court held that New York’s right to privacy statute, Civil Rights Law § 51, protects individuals’ name, portrait, and picture, none of which the Court held was used in GTA’s fictional characters.  See id. at 777.  The look-alike depictions, the Court held, were not close enough to violate Lohan’s and Gravano’s rights to privacy.  See id.

The Court further held that even if the GTA depictions were enough to be considered representations of Lohan and Gravano, their claims failed nonetheless because the video game did not fall under Civil Rights Law § 51’s narrow definitions of “advertising” or “trade.”  See id.  Instead, the Court held, the “video game’s unique story, characters, dialogue, and environment, combined with the player’s ability to choose how to proceed in the game, render it a work of fiction and satire,” which is protected under the statute and the First Amendment.  Id.

Ready to speak on the scope and extent of Civil Rights Law § 51’s right to privacy, the Court of Appeals will hear arguments on the issue today.  Now, we can only hope that the stars will join their depictions in front of the Court for oral argument.

The Appellate Division, First Department’s order can be found here.

Court of Appeals February Session: Arguments of Interest for February 6, 2018

The Court of Appeals returns for the February Session on Tuesday, February 6, 2018. First on the agenda for the Court is Chief Judge Janet DiFiore’s State of Our Judiciary speech earlier in the morning at 11:30 a.m. The Chief Judge is expected to report on the progress of her Excellence Initiative, which was designed to be a detailed and comprehensive evaluation of court processes and procedures to identify needed areas for reform, and to propose a range of reforms to the court system to improve the “quality of justice” for New Yorkers. A livestream of Chief Judge DiFiore’s speech can be seen here.

Then at 2 p.m., the Court gets back to its argument calendar, with four cases on the docket for the day (the Court’s case summaries can be found here). The Court will confront a wide range of issues, including (1) whether an agency subject to the Freedom of Information Law may deny a request for records without confirming whether or not the requested records even exist, (2) whether a criminal defendant’s confession that was obtained 25-28 hours after his arrest and after multiple interrogations may be considered voluntarily made and used against him without the People first establishing that the defendant was provided with access to food, water, a bathroom, and sleep during that time, and (3) whether, in an insurance dispute over long-term environmental contamination, liability for the damages caused can be allocated to insurers for time periods beyond the periods provided in the applicable policies.

No. 19     Matter of Abdur-Rashid v New York City Police Department
                 Matter of Hashmi v New York City Police Department

After September 11th, the law enforcement world changed dramatically. The PATRIOT Act gave the intelligence community far greater surveillance powers, and some of the tactics employed filtered down to the level of the local police. In the wake of the attacks, the New York City Police Department began to conduct covert surveillance of Muslim communities in New York and New Jersey.  According to a series of Pulitzer Prize-winning Associated Press articles, which ran in 2011 and can be found here, “the NYPD dispatched undercover officers into minority neighborhoods as part of a human mapping program.  Police also used informants, known as ‘mosque crawlers,’ to monitor sermons, even when there was no evidence of wrongdoing” (Highlights of AP’s Pulitzer Prize-winning Probe into NYPD Intelligence Operations).

When the surveillance program was revealed, Talib Abdur-Rashid and Samir Hashmi filed separate FOIL requests with the NYPD, and asked for copies of any records relating to the NYPD’s surveillance or investigation of them personally or of organizations with which they were affiliated. In particular, Abdur-Rashid was Imam at Mosque of Islamic Brotherhood in Manhattan, and Hashmi, a Rutgers student, was an officer of the University’s Muslim Student Association.

The NYPD, predictably, denied the requests under FOIL’s law enforcement and public safety exemptions, but would not confirm or deny whether any records actually existed. Basically, the NYPD didn’t want to say whether the men or their organizations had been surveilled or investigated, so it just refused to say whether it was withholding any records that would have been responsive to their requests. That way, the NYPD could in denying the requests keep secret whether any investigation was done.

When Abdur-Rashid and Hashmi challenged the denials of their FOIL requests in court (in separate Article 78 proceedings), the trial courts split. In Abdur-Rashid, Supreme Court adopted the NYPD’s argument that it should be allowed, under FOIL, to deny the request without confirming or denying whether any responsive records exist. This rule, which first arose in Phillippi v CIA (546 F2d 1009 [D.C. Circuit 1976]) and is known as the Glomar doctrine, is widely applied under the federal Freedom of Information Act, but has not been adopted expressly under FOIL. The rationale, the federal courts have explained, is that where the mere fact that responsive documents either do or do not exist would fall within a FOIA exemption—like disclosing that fact would harm national security interests—the responding agency should be permitted to deny the request without confirming or denying the existence of the record.

In Hashmi, however, Supreme Court went the other way. The Court rejected the NYPD’s argument, holding that “adoption of the Glomar doctrine ‘would effect a profound change to a statutory scheme that has been finely calibrated by the legislature’ and ‘would build an impregnable wall against disclosure of any information concerning the NYPD’s anti-terrorism activities.'” That change, the Court reasoned, should come from the Legislature, not the courts.

Resolving this conflict at the trial level, the Appellate Division, First Department sided with the NYPD, and formally adopted the Glomar doctrine for the first time in New York. The Court held that the doctrine falls within the scope of FOIL’s purposes because it is not expanding any FOIL exemption to disclosure, but only allowing the responding agency to withhold information subject to those exemptions. In these cases, the Court held, that means withholding the information concerning whether the NYPD even has any files responsive to the FOIL requests. The Court held that the NYPD was justified in invoking the law enforcement and public safety exemptions to withhold that information because the evidence showed that “confirming or denying the existence of the records would reveal whether petitioners or certain locations or organizations were the targets of surveillance, and would jeopardize NYPD investigations and counterterrorism efforts.”

The Court of Appeals will now decide whether there is, or should be, a state analog to the federal Glomar doctrine.  Or whether that question should be left up to the Legislature entirely.

The Appellate Division, First Department’s order can be found here.

New York DFS Lawsuit Update: Plaintiffs Seek Summary Judgment that DFS Law Violates New York’s Constitutional Ban on Gambling

Gambling is gambling is gambling, the plaintiffs argue. Whether it’s wagering on horse racing at Saratoga, playing poker or roulette in one of New York’s 4 new casinos, or playing daily fantasy sports at DraftKings or FanDuel, it’s all prohibited by the New York Constitution’s ban on gambling. The only difference is that the Legislature has carved out exceptions to the constitutional ban for horse racing and casinos and tried to avoid doing the same in New York’s DFS law. The two-year process to amend the constitution was too long to wait for DFS, apparently. And now, the plaintiffs in White v Cuomo have asked the trial court to declare New York’s law authorizing interactive fantasy sports unconstitutional.

As I wrote about when the trial court denied the State’s motion to dismiss the case, this case asks the Court to construe the scope of the New York Constitution’s ban on “gambling” to decide whether DFS can be allowed by mere legislative amendment, or if an amendment to the New York Constitution is necessary. In particular, Article I, § 9 of the New York Constitution provides, in relevant part: “no lottery or the sale of lottery tickets, pool-selling, book-making, or any other kind of gambling, except [the State lottery, betting on horse races, and casino gambling] shall hereafter be authorized or allowed within this state.” The Constitution, however, doesn’t define the term “gambling.” So, the question that remains, and the one the Court needs to resolve, is whether DFS is prohibited “gambling” under the New York Constitution.

The plaintiffs have now moved for summary judgment to bring that issue before the Court for a decision on the merits. A copy of the plaintiff’s memorandum of law in support of the motion can be found here.

First, a primer on the DFS law and the Legislature’s justification for why DFS is not gambling. As the plaintiffs point out in their papers, throughout history, the New York Attorney General has opined that the Constitution’s ban on gambling includes sports betting. To try to get around that interpretation, the DFS law “declared that interactive fantasy sports are not games of chance, but rather, ‘fantasy or simulation sports games’ based upon ‘the skills of contestants’ and are not based on the current membership of an actual team” (Plaintiffs’ MOL, at 15, quoting Racing, Pari-Mutuel Wagering and Breeding Law § 1400[1][a]). The Legislature also found that the fantasy players get to choose their own teams, so the outcome of the DFS contest depends on who they choose, not on events outside of their own control.  The workaround the Constitution’s plain language, the plaintiffs’ argue, misses the mark.

In support of their argument, the plaintiffs assert that the Constitution does not give the Legislature the power to create exceptions to the ban on gambling without following the constitutional amendment process. Indeed, they note, the Legislature has authorized 4 exceptions to the constitutional ban by amendment: betting on horse racing, games of chance like bingo and lottery run by non-profits, state-run lotteries, and the casinos. The Legislature has not amended the Constitution to permit DFS, and can’t do so merely by legislation.

In enacting [the DFS law], the Legislature has done exactly the opposite of what Article I, § 9 of the Constitution commands. Instead of passing laws to prevent gambling, it has enabled it. It has also provided a tortured interpretation of the term “gambling” that defies its ordinary meaning while violating the principle that exceptions to constitutional prohibitions should be strictly construed (Plaintiffs’ MOL, at 25).

Next, the plaintiffs argue, the best evidence of what the Constitution’s ban on “gambling” prohibits is the statute it adopted immediately after the 1894 amendment that added the ban. In that statute, the plaintiffs’ argue, the Legislature prohibited “any contest involving gambling on ‘the skill, speed, or power of endurance of man or beast’ involved ‘any unknown or contingent event whatsoever'” (Plaintiffs’ MOL, at 26-27, quoting Penal Law § 351). That’s exactly what DFS is, the plaintiffs argue. It’s betting on the performance of an athlete over which the bettor has no control. That’s prohibited gambling, as the Legislature defined it in 1894. And the Legislature can’t change its interpretation of the term “gambling” now after 122 years, the plaintiffs argue.

The plaintiffs then try to take apart the Legislature’s finding that DFS is a game of skill, not game of chance. The plaintiffs acknowledge that DFS players put together a team of individual athletes and that takes some skill, but that alone doesn’t take DFS outside of the realm of prohibited gambling under the Constitution.

Here’s why: although the New York Constitution doesn’t define “gambling,” New York’s criminal code does. That definition could be what the Court will look at to decide whether DFS falls within the scope of prohibited gambling. The Penal Law defines the term “gambling” as risking something of value (e.g., money) “upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he will receive something of value in the event of a certain outcome” (Penal Law § 225.00[2]). Getting a little into the weeds, a “contest of chance” is then in turn defined as “any contest, game, gaming scheme or gaming device in which the outcome depends in a material degree upon an element of chance, notwithstanding that skill of the contestants may also be a factor therein” (Penal Law § 225.00[1]).

So, breaking it down, gambling in New York has been defined as a game where a player risks money (or something else of value) on the outcome of an event that he or she doesn’t control and that involves a “material” degree of chance, even if some skill is required to win. That’s why the plaintiffs argue that the amount of skill that it takes to put together a DFS team doesn’t make it any less gambling. In the end, the DFS player doesn’t have any control over how his or her players performs, and winning therefore depends on a material degree of chance. It’s a pretty strong argument, I think.

The plaintiffs also acknowledge that the Legislature could decline to criminalize what the State has previously called “incidental” gambling, like small office pools or family and friends card games. But, DFS is not that, they argue. The DFS industry is a multi-million dollar business, where the operators make their money by taking a “rake” from the pot of entry fees. Thus, the only route to legalize DFS in New York, the plaintiffs contend, is through an amendment to the New York Constitution.

If the plaintiffs are right, their win will not only devastate DFS in New York, but also online poker, sports betting, and maybe even full season fantasy sports.  Because, as they argue, there’s no difference between putting together a fantasy team for one week or the whole season (Plaintiffs’ MOL, at 3 “[interactive fantasy sports] itself can take many forms, with some contests lasting all season long (e.g., baseball fantasy sports lasting the entire baseball season), or weekly, but also ‘daily fantasy sports’ (‘DFS’), a relatively more recent iteration which is extremely popular in which contests are conducted on a weekly or daily basis”]). If one falls, so falls the others.

As the New York Legislature considers authorizing online poker and sports betting, this case hangs as a cloud over those deliberations. There too the Legislature seems to be urging that it can get around the express constitutional ban on gambling with mere wordsmithing. Until Judge Connolly decides this case, though, the risk of authorizing more forms of online gaming seems to me too steep to take. But that’s why I’m an attorney, not a representative in state government.

The State now has until the end of February to respond in defense of the DFS law, to argue that the interactive fantasy sports authorized by the New York Legislature do not run afoul of New York’s constitutional ban on gambling. It will be a tough task, no question, made more difficult by the Attorney General’s prior case against DraftKings and FanDuel. But, the State does have one thing on its side: a heavy presumption that an act of the Legislature is constitutional.

After the State’s submission and the plaintiffs get a chance to reply, the case will go to the Judge on one legal question: does the New York DFS law violate the New York Constitution’s ban on gambling? The answer to that question will undoubtedly have a huge impact on the landscape for fantasy sports in New York well into the future.

Third Department Extends Child of the Marriage Presumption to Same Sex Spouses for the First Time

A child is born to a married woman. Under New York law, the child is presumed to be a product of the woman’s marriage. The presumption can be rebutted, of course, but in the beginning, the law assumes that the children of married spouses are legitimate. That makes sense. New York’s policy is to keep families together, unless a different arrangement is clearly in the best interests of the children. Although New York cases have never before applied the child of the marriage presumption to same sex spouses, the rationale for its existence applies equally regardless of the married spouses’ gender. And that’s what the Appellate Division, Third Department held today for the first time.

In Matter of Christopher YY. v Jessica ZZ., Jessica, who was legally married to Nichole at the time, was inseminated in an informal procedure at home using Christopher’s sperm, which he had volunteered to donate. They drew up a contract (without legal advice) that said Christopher agreed to donate his sperm and to waive any claim to paternity of a child conceived or to visitation. In return, Jessica and Nicole agreed to waive any right to child support.

On the second try at insemination, Jessica became pregnant and had a baby girl. After her birth, the baby lived with Jessica and Nicole, and Jessica’s two other children, as a family. But after she was born, Christopher apparently had second thoughts. When the baby was about seven months old, Christopher filed a paternity petition, seeking a paternity test, and a separate petition for custody.

Under New York’s family law regime, the paternity petition almost automatically triggers a court-ordered paternity test and a hearing on what is in the best interest of the child. There is an exception, however. Family Court can decline to order the paternity test if it finds, in a written order, that the test “is not in the best interests of the child on the basis of res judicata, equitable estoppel, or the presumption of legitimacy of a child born to a married woman” (Family Ct Act § 532[a]). That’s what Jessica and Nicole argued here. They claimed that the test should not be held because they, as married spouses, were entitled to the child of the marriage presumption, and that Christopher should be equitably estopped from going back on his agreement.

For the first time in New York, the Third Department held that same sex spouses are also entitled to the presumption that children born to married spouses are legitimate. As the Third Department put it,

As the child was born to respondents, a married couple, they have established that the presumption of legitimacy applies, a conclusion unaffected by the gender composition of the marital couple or the use of informal artificial insemination by donor (Opn, at 5-6).

Although the presumption applied, the Court held that that wasn’t the end of the inquiry. Because the presumption is a rebuttable one, the Court had to still decide whether Christopher had shown “clear and convincing evidence excluding the [spouse] as the child’s [parent] or otherwise tending to prove that the child was not the product of the marriage” (Opn, at 6). The law’s formulation for rebutting the presumption, the Court noted, is problematic for same sex spouses.

If the presumption of legitimacy turns primarily upon biology, as some earlier cases indicate, rather than legal status, it may be automatically rebutted in cases involving same-gender married parents. This result would seem to conflict with this state’s strong policy in favor of legitimacy, which has been described as one of the strongest and most persuasive known to the law. Summarily extinguishing the presumption of legitimacy for children born to same-gender married parents would seem to violate the dictates of the Marriage Equality Act (see L 2011, ch 95), which guarantees to such couples the same legal status, effect, right, benefit, privilege, protection or responsibility relating to marriage as exist for different-gender couples (Opn, at 8 [cleaned up]).

So, the Court held, it is time to rework the standard to apply equally to everyone. But, the problem is, the Court didn’t know how that should work.

While a workable rubric has not yet been developed to afford children the same protection regardless of the gender composition of their parents’ marriage, and the Legislature has not addressed this dilemma, we believe that it must be true that a child born to a same-gender married couple is presumed to be their child and, further, that the presumption of parentage is not defeated solely with proof of the biological fact that, at present, a child cannot be the product of same-gender parents. If we were to conclude otherwise, children born to same-gender couples would be denied the benefit of this presumption without a compelling justification. The difficulty is in fashioning the presumption so as to afford the same, and no greater, protections (Opn, at 9).

Instead of articulating a general rule that could be applied in every case, the Court focused on the facts of this one, holding that Christopher had failed his burden to show that the baby girl was not entitled to the legal status of the product of Jessica’s and Nicole’s marriage. Thus, the Court held, the child of marriage presumption had not been rebutted and no paternity test should be given.

The Court alternatively based its decision on equitable estoppel, that the testimony at the best interests of the child hearing established that Christopher had waived his rights and responsibilities of parenting, and should not now be allowed to go back on that agreement. Indeed, Jessica and Nicole relied on his agreement and cared for the baby from her birth as a family. As the Court put it,

Having led respondents to reasonably believe that he would not assert – and had no interest in acquiring – any parental rights and was knowingly and voluntarily donating sperm to enable them to parent the child together and exclusively, representations on which respondents justifiably relied in impregnating the mother, it would represent an injustice to the child and her family to permit him to much later change his mind and assert parental rights (Opn, at 15).

This is a significant decision for LGBT rights in New York, though not necessarily a surprising one after the courts in New York have routinely offered the same protections and rights under the law to same sex couples as they previously did for opposite sex ones. We’ll see if this case heads to the Court of Appeals on the issue of first impression, but given the underlying facts that weigh heavily in Jessica’s and Nicole’s favors, and the alternative ground on which the Third Department based its decision, the Court may not yet need to address it.

The Appellate Division, Third Department’s decision can be found here.



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.



Third Department Justices Disagree on Whether Student Accused of Sexual Assault Should Have Right to Cross-Examine Accuser

The Appellate Division, Third Department has decided a number of significant issues recently involving the State University of New York’s disciplinary system in sexual assault cases. First, it was Matter of Haug v State Univ. of N.Y. at Potsdam, in which the Court annulled the expulsion of a student accused of sexual assault, finding that the hearsay statement of the accuser wasn’t enough to support the discipline. That case is at the Court of Appeals on an appeal as of right, and has been fully briefed, just waiting for an argument date.

Next, it was Matter of Weber v State Univ. of N.Y., Coll. At Cortland, where the Third Department reached a seemingly contradictory result to Haug. In Weber, the facts were a little more clear, but in neither case did the accused student have the “affirmative consent” to sex that the SUNY Code of Conduct requires. While in Haug, the Third Department vacated the expulsion, in Weber, the Court upheld it.

The Third Department’s latest foray into the SUNY disciplinary process in sexual assault cases came just this week. In Matter of Jacobson v Blaise, the Third Department heard a case arising from an alleged sexual assault on Halloween 2015 at SUNY Plattsburgh. Neither the accused student nor the accuser remembered who initiated the sex, and both were drunk at the time. Five days afterward, the accuser reported it as sexual assault, and the accused was issued a “No Contact” order.

At the eventual disciplinary hearing, the accuser listened to the proceedings via Skype, but did not participate. Instead, the lead investigator that had filed the disciplinary charges against Jacobson read the accuser’s statement into the record at the hearing. Jacobson was allowed to cross-examine the investigator at the hearing, but not the accuser herself. This was a major point of contention between the majority and dissent at the Third Department.

As the majority explained, under the “‘Students’ bill of rights’ section in the Education Law, the reporting person has the right to ‘[m]ake a decision about whether or not to . . . participate in the judical or conduct process . . . free from pressure by the institution’ (Education Law § 6443).” This protection has two components: first, the accuser can decide whether or not to participate in the hearing, and the school can’t tell him or her that failure to participate could hinder the case; second, the accuser has the right to remain anonymous. In light of these protections, the Court held, Jacobson had no due process right to cross-examine his accuser at the hearing, whether in person, electronically through Skype, through the hearing officer, or by written questions. His right to question the investigator about the accuser’s statement was enough in this case, the majority decided.

The majority recognized, however, that there may be a case where a limited right to cross-examination of the accuser should be permitted. In Weber, for example, “the accused student submitted questions through the hearing officer who reworked the question ‘into a more neutral form'” (Weber, 150 AD3d at 1432). Thus, the majority set out a new rule for when the limited right to cross-examine the accuser arises:

where a material factual conflict exists between the statements of a reporting person and an accused student, a mechanism should be made available for the accused student to present questions for the reporting person to address, akin to that utilized in Doe or Weber.

The two Justice dissent, on the other hand, would have held that Jacobson’s due process rights had been violated. The dissent countered:

The dissent recognized that cross-examination is not necessary or warranted in many student disciplinary cases, most of which result in nothing more than a slap on the wrist or a suspension from which the student can return to school. But sexual assault cases are different, the dissent reasoned. They lie at the extreme end of disciplinary consequences and, thus, an accused student should have a full panoply of due process rights to cross-examine the accuser in whatever form the hearing officer finds appropriate.

In this case, the dissent noted, the accuser was already watching the hearing via Skype and could have been questioned that same way, or Jacobson could have been allowed to submit questions for the hearing officer to ask. Either way, the dissent argued, the failure to give Jacobson this right deprived him of due process at the hearing and rendered his expulsion void.

Here’s the thing though. The majority too found a reason to vacate Jacobson’s expulsion. It just wasn’t on due process grounds. Instead, the majority held that the investigator had at the hearing improperly defined what it meant to obtain affirmative consent to sex and suggested that Jacobson had to have been the one to ask for consent because he initiated the sex by penetrating the accuser. That’s not the right definition of either affirmative consent or initiation, the majority held, and it seriously undermined the Board’s decision to sustain the sexual assault charges. So, it sent the case back to the SUNY Disciplinary Board for a new hearing.

The dissent agreed with that flaw too, but because it also found a due process violation, it wouldn’t have sent the case back. Instead, it would have annulled the determination and ended the matter altogether.

Now, Jacobson will have a chance to go back before the Board for a new hearing in the charges, which may be of little comfort to him if he is again denied a chance to have the accuser questioned.

The right of cross examination issue in sexual assault disciplinary hearings is a hard and interesting one. There are certainly important interests on both sides, and I haven’t done enough research to know how those interests should be balanced.

It’s the kind of issue that should be heard by the Court of Appeals so there is a single rule to be applied statewide, but that won’t happen quite yet, unless the Third Department dissenters grant Jacobson leave to appeal. Without an Appellate Division leave grant, the Court of Appeals can’t hear the issue in this case because the remand for a new administrative hearing renders the Appellate Division order nonfinal. It seems to me, though, that this would be a good companion case to Haug, which is now fully submitted before the Court of Appeals. I can’t imagine it will be long before the Court is asked to address the question.

The Appellate Division, Third Department order can be found here.

Court of Appeals January Session: Arguments of Interest for January 10, 2018

The Court of Appeals wraps up its January Session arguments on January 10, 2018 with cases that make the procedural geek in me smile. There are three cases on the argument calendar today (the Court’s case summaries can be found here), two of which involve really interesting (to me at least) procedural issues about counterclaims and the courts’ interests of justice jurisdiction. Here are the issues the Court will address: (1) does the Federal Rules of Civil Procedure’s mandatory counterclaims rule apply in New York state litigation to give res judicata effect to a counterclaim that was not pled in a prior federal suit; (2) does an appellate court have interests of justice jurisdiction to review an issue that a criminal defendant waived before the trial court; and (3) is a criminal defendant denied effective assistance of counsel by withdrawing a Hundley motion to suppress a videotaped confession after the trial court has granted a hearing on the motion.

No. 16    Paramount Pictures Corporation v Allianz Risk Transfer AG

In a suit about a lost investment in movies, the issue before the Court of Appeals has absolutely nothing to do with the movie or the lost investment. Instead, it’s the kind of issue that sparks interest in the community of appellate lawyers who look at how the courts work. In this case, Allianz invested in a Paramount film, but agreed to waive any claims against Paramount and not to sue if the investment went south.

The investment tanked, and Allianz sued Paramount in federal court anyway, notwithstanding the waiver of claims and bar to lawsuits. Paramount defended the litigation based on the waiver provision, but never raised the covenant not to sue as an affirmative defense or pled Allianz’s breach of it as a counterclaim in the federal suit. What’s noteworthy about that is that Rule 13(a) of the Federal Rules of Civil Procedure require any party to a suit to assert any mandatory counterclaims that it has in that litigation or else they will later be barred from doing so.

After the federal court predictably dismissed the case because of the waiver provision, Paramount brought this breach of contract suit in state court based Allianz’s breach of the covenant not to sue. Allianz moved to dismiss, arguing that res judicata barred Paramount’s breach of contract claim because it was a mandatory counterclaim that was never asserted in the federal suit and was barred by FRCP Rule 13(a).

Supreme Court denied the motion to dismiss, citing New York’s permissive counterclaims rule under CPLR 3011. New York doesn’t subscribe to the federal mandatory counterclaim rule, the Court held, and to adopt it would conflict with New York’s rule.

The Appellate Division, First Department, however, reversed and dismissed the suit. The Court held that Rule 13(a) should be applied in state court litigation, and Paramount’s breach of contract claim was thus barred by res judicata for failure to assert it as a mandatory counterclaim in the federal suit.

The Court of Appeals will now hear arguments on this issue of first impression in New York. In a practical sense, it would make sense to me that res judicata should bar any mandatory counterclaim that a party was required to assert in a prior federal suit, but failed to do so. Holding the other way would be a disservice to judicial economy and would allow parties to litigate multiple suits in different forums (with different judges and rules) claims that could all be resolved in a single case all at once. But that will be up to the Court to decide.

The Appellate Division, First Department’s order can be found here.

Court of Appeals January Session: Arguments of Interest for January 9, 2018

The Court of Appeals is back for the final week of the January Session. There are only two days of argument this week, and three cases are on the docket today (the Court’s case summaries can be found here). The Court will hear arguments on the following issues: (1) whether the Long Island Power Authority is entitled to governmental immunity from tort liability for its failure to shut down the power grid in Queens before or during Hurricane Sandy; (2) does an indenture trustee have standing to enforce all rights of bondholders, or just limited authority to bring actions for payment on or to enforce the terms of the notes; and (3) whether a criminal defendant is denied a constitutional speedy trial where the prosecution delays his trial for six years while trying to obtain the cooperation of a co-defendant.

No. 11     Connolly v Long Island Power Authority
No. 12     Baumann v Long Island Power Authority
No. 13     Heeran v Long Island Power Authority

In these three consolidated cases, about 180 property owners allege that their homes were destroyed or their properties damages by fires caused when the Hurricane Sandy storm surge came into contact with LIPA’s still live power lines. The property owners allege that this damage was foreseeable and, thus, LIPA was negligent in not shutting down the power grid before the storm.

Supreme Court denied LIPA’s motion to dismiss the cases, holding that it was not entitled governmental immunity because running the power grid is an act within LIPA’s proprietary capacity. Power has traditionally been provided by the private section, the Court reasoned, and so LIPA’s actions could not be immune from the negligence suits.

The Appellate Division, Second Department affirmed, with one Justice dissenting. The majority reasoned that LIPA was created by the Legislature as a substitute for what was formerly a private enterprise, and thus its actions in operating the power grid were proprietary, not governmental. As such, the majority held that LIPA was not immune from suit. The dissenter argued, on the other hand, that LIPA is a governmental entity and its preparations for and responses to the hurricane were governmental functions. The mere fact that the power grid used to be operated privately does not eliminate the governmental nature from LIPA’s actions, the dissenter reasoned.

So, what actions can be held to be in a public authority’s proprietary capacity that would subject it to normal tort liability? Are there any at all?  The Court of Appeals will hear arguments on those questions today.

The Appellate Division, Second Department’s order can be found here.


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