Opinion
21279/04.
Decided December 2, 2004.
Upon the foregoing papers, petitioner New York City Transit Authority (the Transit Authority) seeks a judgment, pursuant to Article 78, (a) vacating the order of Edward A. Friedland, Acting Commissioner (the Commissioner) of the New York State Division of Human Rights (the SDHR), which remanded the case of State Division of Human Rights on the Complaint of Joseph Palermo against the New York City Transit Authority, for the reopening of a hearing that concluded on November 15, 2001 and resulted in a recommended opinion and order that said complaint should be dismissed, and (b) ordering that the recommended findings of fact, decision, opinion and order issued by Administrative Law Judge Ronald A. Gregg (the ALJ), dismissing said complaint, be adopted by the SDHR. The SDHR moves to dismiss the petition on the ground that the Transit Authority has failed to exhaust its administrative remedies and, therefore, is not entitled to Article 78 relief.
On September 25, 1989, Joseph Palermo, an employee of the Transit Authority, filed a verified complaint with the State Division of Human Rights alleging that the Transit Authority had discriminated against him on the basis of his age. At the time he filed the complaint, Palermo was 62 years old. Palermo claimed that the alleged discrimination occurred on August 28, 1989 when he was advised that he would have to be reassigned to "the road" because none of the managers had found a job for him in the new crew assignment sections. Allegedly, the individuals selected for the new crew assignment sections were younger men and women who were performing jobs for which Palermo was qualified.
On November 13, 14 and 15, 2001, a hearing was held before the ALJ concerning Palermo's complaint. Palermo was represented by the SDHR at the hearing. On November 13, 2001, the ALJ denied as untimely an application by counsel to amend Palermo's original complaint to include a disability claim and ordered that the hearing would be restricted to matters related to the original complaint. On January 16, 2003, the ALJ issued his recommended findings of fact and opinion and order dismissing Palermo's complaint. The ALJ determined, in relevant part:
[Palermo's] conclusory reasoning that he was entitled to a position is not proof of discrimination. [Palermo] did not come forward with sufficient proof that any of [the Transit Authority's] reasons for denying him a transfer were a pretextual excuse for discriminating against him. [Palermo] failed to produce sufficient evidence that [the Transit Authority] discriminated against him because of his age or for any other discriminatory reason.
On February 28, 2003, SDHR counsel filed objections to the recommended order of the ALJ. In a decision and order dated April 30, 2004, the Commissioner issued a Remand Order which stated that "the case is . . . remanded and the hearing in this matter shall be reopened within sixty days of the date of this Order to complete the record." The Commissioner determined that there was "insufficient evidence in the record [from the subject hearing] on which to make a determination regarding unlawful discrimination." Specifically, the Commissioner found that:
Comparative data is necessary to complete the record in this matter. This should include, but not be limited to evidence of the number of employees reassigned to the "road" and the number of employees selected for the new decentralized crew assignment offices. It should include for each employee: name, date of birth, date of hire, title, name of new department, and a copy of the employee's personnel file.
Additionally, evidence should be accepted on the issue of [Palermo's] loss of overtime. The conclusion that there could be no claim for loss of overtime since [Palermo] was overtime eligible both before and after his assignment was erroneous. The relevant issue is whether those employees selected for the decentralized offices received overtime, and if so, how much, as compared to the amount of overtime [Palermo] received in his new assignment. If liability is found, evidence of [Palermo's] loss of overtime will be required to determine damages.
Additionally, the Commissioner required the ALJ to reconsider Palermo's motion to amend his complaint to include a disability discrimination claim. Noting that due to the ALJ's denial of said motion to amend as "untimely" Palermo was barred from introducing evidence regarding his sick leave use at the hearing, the Commissioner stated that "the record in this matter shall be completed with regard to [Palermo's] disability, use of sick leave and constructive discharge claim, including damages due to [his] alleged forced early retirement."
In regard to the conduct of the hearing itself, the Commissioner identified a number of evidentiary rulings, as well as testimony which the Commissioner decided was erroneously deemed "irrelevant" by the ALJ, and directed the ALJ to reconsider same upon the reopening of the subject hearing. Finally, the Commissioner found that Palermo had been denied an opportunity upon the conclusion of the Transit Authority's case to rebut the testimony of the Transit Authority's witnesses and therefore should be "afforded an opportunity for rebuttal testimony" when the hearing was reopened upon remand.
It is well settled that the SDHR "is given jurisdiction by statute to investigate complaints of discrimination" ( Matter of R.R. Bowker Co. v. Kramarsky, 72 AD2d 705, 706; see also Anker Management Corp. v. State of New York, Div. of Human Rights, 215 AD2d 706). It is similarly well established that the "[r]emedy for asserted error of law in the exercise of that jurisdiction lies first in administrative review and following exhaustion of that remedy in subsequent judicial review pursuant to section 298 of the Executive Law" ( Matter of R.R. Bowker Co., 72 AD2d at 706; see also Matter of Tessy Plastics Corp. v. State Div. of Human Rights, 47 NY2d 789, 791; Anker Management Corp., 215 AD2d at 708; Matter of the Town of North Greenbush v. New York State Div. of Human Rights, 84 AD2d 618).
Moreover, "CPLR 7801 . . . provides that a determination must be 'final' before being subjected to CPLR article 78 review" ( Matter of Geherin v. Sylvester, 75 AD2d 991; see also Matter of Cohoes Memorial Hospital v. Department of Health, 48 NY2d 583; Quimby v. State Div. of Human Rights, 305 AD2d 416). An agency determination, therefore, becomes ripe for review when the determination becomes final and binding upon the petitioner seeking such review ( see Yarbough v. Franco, 95 NY2d 342, 346). "An agency determination becomes final and binding within the meaning of [article 78] when the petitioner seeking review has been aggrieved by it" ( Matter of Mateo v. Board of Educ. of City of New York, 285 AD2d 552, 553). "A petitioner is aggrieved once the agency has issued an unambiguously final decision that puts the petitioner on notice that all administrative appeals have been exhausted" ( Carter v. State of New York, Executive Dept., Div. of Parole, 95 NY2d 267, 270).
When a final determination has not been issued and "there are further administrative steps available to secure a change in result, a party must pursue them before going to court" ( Matter of Geherin, 75 AD2d at 991). "The doctrine of administrative remedies serves several important functions: first, it conserves judicial resources; second, it protects the integrity of administrative hearings and appeals; and third, it insures that the issues receive the benefit of the experience and expertise of the agency" ( id. [citations omitted]; see also Watergate II Apartments v. Buffalo Sewer Auth., 46 NY2d 52, 57 [noting that the administrative review doctrine promotes and comports with the "goals of relieving the courts of the burden of deciding questions entrusted to an agency, preventing the premature judicial interference with the administrators' efforts to develop, even by some trial and error, a co-ordinated, consistent and legally enforceable scheme of regulation and affording the agency the opportunity, in advance of possible judicial review, to prepare a record reflective of its expertise and judgment"]). The rule that all administrative remedies must be exhausted prior to the judicial review of an agency's determination "need not be followed [however] . . . when an agency's action is challenged as either unconstitutional or wholly beyond its grant of power or when resort to an administrative remedy would be futile" ( Watergate II Apartments, 46 NY2d at 57).
In the instant proceeding, the Transit Authority is not entitled to judicial review of the Commissioner's nonfinal Remand Order. The Transit Authority argues that the subject Remand Order is arbitrary and capricious and should be vacated because the Commissioner "improperly rejected the findings of law and fact by the ALJ and the discretionary rulings by the ALJ regarding . . . various exhibits and improperly remanded the case for further proceedings." The Transit Authority correctly notes that the standard of review of an administrative determination by the SDHR is whether such determination is arbitrary and capricious under CPLR article 78 ( Quimby, 305 AD2d at 417 ["The courts have the power to review the (SDHR's determination), and may overturn it if it is arbitrary and capricious"] [internal quotation marks and citation omitted]). The Remand Order, however, did not constitute a final decision on the merits of Palermo's discrimination complaint, but rather merely remanded the matter to the ALJ for further proceedings in order to insure that any ultimate determination by the Commissioner as to said complaint would be adequately supported by a sufficiently developed record. As the Commissioner has remanded Palermo's complaint in order to reopen the hearing and supplement the record, "there are further administrative steps available to [the Transit Authority to] secure a change in result, [and the Transit Authority] must pursue them before going to court" to seek review of the Commissioner's interim Remand Order ( Matter of Geherin, 75 AD2d at 991).
Although the Transit Authority appears to argue that the Commissioner improperly exceeded his authority by issuing the remand order, the Commissioner, "upon 'finding that the record is incomplete or fails to provide the basis for an informed decision,' has the power [, pursuant to 9 NYCRR 465.10 (k),] to direct further [hearing] sessions for the purpose of taking additional evidence or for other purposes" ( Matter of Farley v. New York State Dept. of Civil Service, 142 AD2d 783 quoting 9 NYCRR 465.10). Since the Transit Authority does not dispute the Commissioner's authority to issue said Remand Order, but rather essentially disagrees with the substance and scope of the Remand Order itself, it cannot claim that the instant matter falls within the exception to the exhaustion of administrative remedies which allows a party to avoid further administrative proceedings prior to exhaustion where the administrative agency acts "wholly beyond its grant of power" ( Watergate II Apartments, 46 NY2d 52 at 57). Here, the Commissioner reviewed the record and determined that the subject hearing should be reopened in order to supplement the record and to allow the ALJ to reconsider Palermo's motion to amend his complaint to include a disability discrimination claim, as well as a variety of evidentiary rulings which, in the Commissioner's view, were not adequately supported. The Transit Authority's allegations that the Commissioner erred in his determination and did not properly evaluate the proposed facts and law contained in the recommended opinion and order of the ALJ do not demonstrate that the Commissioner's actions so exceeded the bounds of his statutory authority that the court should intervene and review the Remand Order prior to the issuance of a final determination by the Commissioner on Palermo's discrimination claims. Moreover, as the Transit Authority can only speculate, prior to the completion of the reopened hearing and a concomitant final determination by the Commissioner, as to the outcome of Palermo's discrimination claims, and may in fact ultimately be successful in defending against such claims, the Transit Authority is not sufficiently "aggrieved" for purposes of instituting an article 78 proceeding ( Carter, 95 NY2d at 270 ["A petitioner is (not) aggrieved (until) the agency has issued an unambiguously final decision that puts the petitioner on notice that all administrative appeals have been exhausted"), nor can it claim that resort to further administrative proceedings would be futile ( see Watergate II Apartments, 46 NY2d at 57).
The Transit Authority also argues that Executive Law § 298, which states that "any complainant, respondent or other person aggrieved by an order of the commissioner which is an order after public hearing . . . may obtain judicial review thereof" applies to the instant remand order and allows for judicial review of same. The Transit Authority has not cited, however, nor is the court aware of, any authority which has construed said Executive Law provision as abrogating the well established rules concerning exhaustion of administrative review and article 78 judicial review of the final determination of administrative agencies. Accordingly, the court finds that Executive Law § 298 does not support judicial review by this court of the subject Remand Order.
As a result, given the lack of a final determination by the Commissioner in regard to Palermo's discrimination claims, respondent's motion to dismiss petitioner's article 78 petition, which seeks judicial review of a nonfinal Remand Order of the Commissioner, is granted and the petition is hereby dismissed.
The foregoing constitutes the decision, order and judgment of the court.