Opinion
Appeal No. 14221 Index No. 158415/18Case No. 2020-03681
09-28-2021
Christopher Frey, Plaintiff-Appellant, v. Health Management Systems, Inc., Defendant-Respondent. Appeal No. 14221 Case No. 2020-03681
Harris Law Firm PC, Austin, TX (T. Alan Harris of the bar of the State of Texas, admitted pro hac vice, of counsel), for appellant. Gibson, Dunn & Crutcher LLP, New York (Lee R. Crain of counsel), for respondent.
Harris Law Firm PC, Austin, TX (T. Alan Harris of the bar of the State of Texas, admitted pro hac vice, of counsel), for appellant.
Gibson, Dunn & Crutcher LLP, New York (Lee R. Crain of counsel), for respondent.
Before: Acosta, P.J., Singh, Kennedy, Mendez, Higgitt, JJ.
Order, Supreme Court, New York County (Louis L. Nock, J.), entered July 29, 2020, which granted defendant's motion to dismiss the complaint, unanimously affirmed, without costs.
After his employment with defendant was terminated in 2013, plaintiff, represented by counsel, availed himself of the procedures set forth in § 1553 of the American Recovery and Reinvestment Act of 2009 (Pub L 111-5, 123 Stat 115) for bringing a whistleblower retaliation claim before the federal Department of Health and Human Services (HHS). After conducting an extensive investigation, HHS denied plaintiff's claim on the ground that the evidence did not support his contention that the termination was retaliatory. The United States Court of Appeals affirmed HHS's determination (Frey v United States Department of Health and Human Services, 920 F.3d 319 [5th Cir 2019]). In 2018, plaintiff commenced this whistleblower retaliation action under State Finance Law § 191.
Supreme Court properly concluded that the HHS determination bars this action under the doctrine of collateral estoppel (see Ryan v New York Tel. Co., 62 N.Y.2d 494, 500-501 [1984]). Plaintiff received a full and fair opportunity to litigate his claim before HHS, which conducted "a sufficiently thorough investigation" of the claim even in the absence of a formal adversarial hearing and opportunity to confront witnesses through cross-examination or a confrontation conference (Reubens v New York City Dept. of Juvenile Justice, 930 F.Supp. 887, 891 [SD NY 1996]; see Kirkland v City of Peekskill, 828 F.2d 104, 107-109 [2d Cir 1987]; Matter of Murphy v Russell Sage Coll., 134 A.D.2d 716, 717 [3d Dept 1987]). Further, plaintiff may be fairly precluded from relitigating an issue decided against him in the HHS proceeding that he initiated knowing the statutorily prescribed procedures HHS would use (see Allied Chem. v Niagara Mohawk Power Corp., 72 N.Y.2d 271, 277 [1988], cert denied 448 U.S. 1005 [1989]; Kaufman v Eli Lilly & Co., 65 N.Y.2d 449, 455 [1985]).
We reject plaintiff's contention that he was not afforded a full and fair opportunity to litigate before HHS because appellate review was limited to an arbitrary and capricious standard rather than a full review on the merits (see Johnson v New York City Dept. of Educ., 2011 WL 13300034, *3, 2011 U.S. Dist LEXIS 172308 *10-11 [ED NY Apr. 22, 2011, No. 08-CV-5260 (ENV)(LB)]).Indeed, New York courts give preclusive effect to agency determinations confirmed in CPLR article 78 proceedings employing the same highly deferential standard (see CPLR 7803[3]; Coffey v CRP/Extell Parcel I, L.P., 117 A.D.3d 585, 585 [1st Dept 2014], lv dismissed 24 N.Y.3d 934 [2014]; Matter of Smolarczyk v Towns, 166 A.D.3d 786, 788 [2d Dept 2018]).
In any event, as Supreme Court further concluded, the action is untimely. Because plaintiff is a Texas resident and his claim accrued in Texas, pursuant to CPLR 202, New York's "borrowing statute," the three-year statute of limitations for similar claims under Texas law applies (Texas Human Resources Code § 36.115[c]).