Opinion
2011-12-22
In the Matter of Anthony J. SABINO, Appellant, v. Thomas P. DiNAPOLI, as Comptroller of the State of New York, et al., Respondents.
DeGraff, Foy & Kunz, L.L.P., Albany (James W. Roemer Jr. of Roemer, Wallens, Gold & Mineaux, L.L.P., of counsel), for appellant. Eric T. Schneiderman, Attorney General, Albany (William E. Storrs of counsel), for respondents.
DeGraff, Foy & Kunz, L.L.P., Albany (James W. Roemer Jr. of Roemer, Wallens, Gold & Mineaux, L.L.P., of counsel), for appellant. Eric T. Schneiderman, Attorney General, Albany (William E. Storrs of counsel), for respondents.
Before: MERCURE, ACTING P.J., PETERS, MALONE JR., KAVANAGH and STEIN, JJ.
STEIN, J.
Appeal from a judgment of the Supreme Court (McDonough, J.), entered April 18, 2011 in Albany County, which, in a proceeding pursuant to CPLR article 78, granted respondents' motion to dismiss the petition.
Petitioner, an attorney admitted to practice in New York, was employed by the Town of Oyster Bay, Nassau County for various periods of time between 1965 and 2001. Since October 1989, he has also held the part-time position of counsel to the Bethpage Water District in Nassau County and, for at least part of that time, he also had a private law practice. During the course of his employment with both the Town and the Water District, petitioner was reported as an employee to respondent New York State and Local Retirement System.
In 2008, respondent Comptroller promulgated regulations for the Retirement System to provide guidance as to whether employers should classify professional service providers as employees or as independent contractors ( see 2 NYCRR 315.3[c] ). Previously, such determination had been guided by the employer's consideration of several common-law factors, which were set forth in a “Financial Management Guide” issued by the Comptroller in 1992. Here, after reviewing petitioner's status with respect to his employment with the Water District, respondent Deputy Comptroller determined in August 2010 that petitioner was an independent contractor and revoked a portion of his service credits in the Retirement System. The Deputy Comptroller's determination was expressly based upon seven factors, all of which were consistent with the 2008 regulations. Petitioner [have] advised that he was entitled to an administrative hearing if he wished to contest the determination. In addition to requesting such a hearing, petitioner commenced this proceeding pursuant to CPLR article 78, seeking an order annulling the Deputy Comptroller's determination.
At petitioner's request, the hearing was adjourned pending the resolution of this litigation.
Petitioner argues that respondents violated his rights under article V, § 7 of the N.Y. Constitution and the 14th Amendment to the U.S. Constitution by retroactively applying new standards and factors that were not in effect at the time he became a member of the Retirement System. Respondents moved, pre-answer, to dismiss the petition based upon petitioner's failure to exhaust his administrative remedies. Supreme Court rejected petitioner's assertions that he was excused from the exhaustion requirement because he raised constitutional issues and that pursuit of available administrative remedies would be futile because he cannot factually dispute the factors enumerated in support of the Deputy Comptroller's determination. Accordingly, Supreme Court granted respondents' motion, without prejudice, and this appeal ensued.
The application of the 2008 regulations to individuals, such as petitioner, who were already enrolled in the Retirement System has been the subject of much litigation ( see Matter of Hoover v. DiNapoli, 75 A.D.3d 875, 875 n. 1, 905 N.Y.S.2d 685 [2010]; Matter of D'Agostino v. DiNapoli, 70 A.D.3d 1285, 894 N.Y.S.2d 778 [2010]; Swergold v. Cuomo, 70 A.D.3d 1290, 896 N.Y.S.2d 495 [2010]; Matter of Roemer v. Cuomo, 67 A.D.3d 1169, 888 N.Y.S.2d 669 [2009]; Matter of Hogan v. Cuomo, 67 A.D.3d 1144, 888 N.Y.S.2d 665 [2009] ).
We affirm. It is well settled that a party seeking to challenge the action of an administrative agency must first exhaust available administrative remedies ( see Watergate II Apts. v. Buffalo Sewer Auth., 46 N.Y.2d 52, 57, 412 N.Y.S.2d 821, 385 N.E.2d 560 [1978]; Matter of Connor v. Town of Niskayuna, 82 A.D.3d 1329, 1330, 917 N.Y.S.2d 759 [2011]; Swergold v. Cuomo, 70 A.D.3d at 1293, 896 N.Y.S.2d 495). Although the exhaustion requirement may be excused when, for example, a party asserts a constitutional challenge to an agency's action or “when resort to an administrative remedy would be futile” ( Watergate II Apts. v. Buffalo Sewer Auth., 46 N.Y.2d at 57, 412 N.Y.S.2d 821, 385 N.E.2d 560; see Matter of Connerton v. Ryan, 86 A.D.3d 698, 699, 926 N.Y.S.2d 741 [2011] ), “the mere assertion that a constitutional right is involved will not excuse the failure to pursue established administrative procedures that can provide adequate relief” ( Matter of Pfaff v. Columbia–Greene Community Coll., 99 A.D.2d 887, 888, 472 N.Y.S.2d 480 [1984]; see Matter of Schulz v. State of New York, 86 N.Y.2d 225, 232, 630 N.Y.S.2d 978, 654 N.E.2d 1226 [1995], cert. denied 516 U.S. 944, 516 U.S. 944, 116 S.Ct. 382 [1995] ). Thus, for instance, “[a] constitutional claim that may require the resolution of factual issues reviewable at the administrative level should initially be addressed to the administrative agency having responsibility so that the necessary factual record can be established” ( Matter of Schulz v. State of New York, 86 N.Y.2d at 232, 630 N.Y.S.2d 978, 654 N.E.2d 1226; accord Matter of Finch, Pruyn & Co. v. Kearns, 282 A.D.2d 858, 859, 722 N.Y.S.2d 838 [2001] ).
Here, even assuming that the Deputy Comptroller applied the 2008 regulation to determine petitioner's status, a factual issue remains as to whether the regulation represents a meaningful and substantial change in the policy of the Retirement System or was merely the codification of existing policy. Such a determination, which involves interpretation of the Retirement System's own regulations, is best left in the first instance to the administrative agency “so that a clearer formulation of and the rationales for agency policy may be fully aired” ( Lehigh Portland Cement Co. v. New York State Dept. of Envtl. Conservation, 87 N.Y.2d 136, 143, 638 N.Y.S.2d 388, 661 N.E.2d 961 [1995]; see Matter of Hakeem v. Wong, 223 A.D.2d 765, 766, 636 N.Y.S.2d 440 [1996], lv. denied 88 N.Y.2d 802, 644 N.Y.S.2d 688, 667 N.E.2d 338 [1996]; Matter of Grattan v. Department of Social Servs. of State of N.Y., 131 A.D.2d 191, 193–195, 521 N.Y.S.2d 162 [1987], lv. denied 70 N.Y.2d 616, 526 N.Y.S.2d 436, 521 N.E.2d 444 [1988] ). Nor is there anything in the record “which clearly indicates that respondent[s] [have] predetermined the issue ... or [have] construed the relevant regulation in a way that would dictate an adverse result of an administrative hearing. Hence, petitioner has failed to make the requisite showing that pursuit of administrative remedies would be futile” ( Matter of Grattan v. Department of Social Servs. of State of N.Y., 131 A.D.2d at 193, 521 N.Y.S.2d 162). Supreme Court, therefore, properly granted respondents' motion to dismiss the petition, without prejudice.
Petitioner's remaining contentions have been considered and are unavailing.
ORDERED that the judgment is affirmed, without costs.