Silver Dragon Rest. v City of New York
2004 NY Slip Op 30317(U)
March 19, 2004
Supreme Court, Kings County
Docket Number: 30727/03
Judge: David Schmidt
Republished from New York State Unified Court
System's E-Courts Service.
Search E-Courts (http://www.nycourts.gov/ecourts) for
any additional information on this case.
This opinion is uncorrected and not selected for official
publication.
[* 1]
At an IAS Term, Part 47of the Supreme Court of the
State of New York, held in and for the County of
Kings, at the Courthouse, at Civic Center, Brooklyn,
New York, on the 19'hday of March, 2004
P R E S E NT:
HON. DAVID I. SCHMIDT
Justice.
_
_
_
_
_
_
_
_
_
c
_
_
_
_
_
_
_
_
_
_
-
-
-
-
-
-
-
-
-
-
-
-
-
-X
-
SILVER DRAGON RESTAURANT,
Petitioner,
- a4ainst -
Index No. 30727/03
THE CITY OF NEW YORK
COMMISSI :IN ON HUMAN RIGHTS,
DEREK BRYSONARK, DR.EDISONACKSON, &
P
J
GRACE L- 'u-VOLCKHAUSEN,
COMMISSIONERS,
INDIVIDUi .LLY AND AS MEMBERS OF
THE NEW "ORK CITY COMMISSION ON
H UMAN R GHTS,
The follovin~
DaDers numbered 1 to 5 read on this motion:
PaDers Numbered
Notice of ;vlotion/Order to Show Cause/
PetitiodC-oss Motion and
Affidavits (Affirmations) Annexed
1-2
Opposing Allidavits (Afiirmations)
3-4
Reply Aff:davits (Affirmations)
5
Affidavit (Affirmation)
Other Pap6 :rs_ -
UFon the foregoing papers, petitioner Silver Dragon Restaurant (Silver Dragon)
moves for a judgment, pursuant to CPLR Article 78, annulling or modifying the decision and
order of rtcspondent City of New York Commission on Human Rights (Commission), dated
[* 2]
July 28,2003, which: (1) found that petitioner had racially discriminated against customers,
(2) imposed a $10,000 civil penalty and (3) required petitioner to implement an antidiscrimination policy.
Respondent Commission and its individual commissioners, respondents Derek Bryson
Park, Dr. Edison Jackson and Grace Lyu-Volckhausen, cross-move for an order enforcing
the above-mentioned decision and order pursuant to
$5 8-125l and 8-1262 of the
Administrative Code of the City of New York.
Background
The Pre- tiearing Events
This case stems from incidents which occurred at a Chinese restaurant located on 86‘h
Street in 3rooklyn. Dana Monroe, an African-American, had filed a verified complaint with
the Cormnission on or about May 3 1,2002 that charged Seafood King, a Chinese restaurant
‘
Subdivision (a) of that provision provides, in part, that: Any action or proceeding that
y
may be a propriate or necessary for the enforcement of any order issued by the commission
pursuant to this chapter. . . may be initiated in any court of competent jurisdiction on behalf of
the commission.”
Subdivision (a) of that provision, effective September 16, 1991, pertinently provides
that: “whxe the commission finds that a person has engaged in an unlawful discriminatory
practice, the commission may, to vindicate the public interest, impose a civil penalty of not more
than fifty ihousand dollars. Where the commission finds that an unlawful discriminatory practice
was the rcbult of the respondent’s willful, wanton or malicious act or where the commission finds
that an ac. of discriminatory harassment or violence as set forth in chapter six of this title has
occurred, the commission may, to vindicate the public interest, impose a civil penalty of not
more than one hundred thousand dollars.”
SL.bdivision (d) of that provision provides that: “[aln action or proceeding may be
commenc :d in any court of competent jurisdiction on behalf of the commission for the recovery
of the civil penalties provided for in this section.”
2
[* 3]
which had been in business at the above location, with racially discriminating against her on
March 4,2002 by refusing to prepare food for her until she paid for the order.
Deputy Commissioner Clifford Mulqueen, a white male, and Commission staff
attorney Iqatalie Holder-Winfield, an African-American female, subsequently went to the
restaurant on July 15,2002 to determine if it treated black patrons differently from patrons
from other racial or ethnic groups. By that time, the ownership of the restaurant had changed
and its name was Silver Dragon Restaurant. Ms. Holder-Winfield entered before her
colleague, according to his investigation memo, and an Asian male worker behind the
counter, who handled her “take-out” order, told her to “pay now” before processing the order.
The investigation memo then states that the same worker gave Deputy Commissioner
Mulqueeli his food before asking for any money. The memo further claims that Ms. HolderWinfield observed two additional non-black patrons receive their food before paying.
T1:is incident resulted in the filing of a verified amended complaint by both Dana
Monroe i nd the Commission itself on or about August 21,2002. The amended complaint
I
~%i
t:,ixitd the M2rch 4,?flO2 311eg4finn, added the Cnmmission as a cnmphinant, mmed
Silver Dragon as the respondent and charged it with responsibility for the alleged racial
discrimination on both March 4,2002 and July 15, 2002.3
Specifically, the administrative complaint charged a violation of Administrative Code
9 8-107 ( L : ) (a) which provides that: “It shall be an unlawful discriminatory practice for any
person, being the owner, lessee, proprietor, manager, superintendent, agent or employee of any
place or p ,ovider of public accommodation because of the actual or perceived race, creed, [or]
color. . . of any person directly or indirectly, to refuse, withhold from or deny to such person any
of the accnmmodations, advantages, facilities or privileges thereof . . .”
Administrative Code
3
[* 4]
Because Silver Dragon had not begun its sublet of the premises until April 10,2002,
after Seafood King’s dispossession, Silver Dragon’s verified answer to the Commission
asserted an affirmative defense that “it was not in business and did not occupy the restaurant
premises” on March 4,2002 when Dana. Monroe allegedly experienced racial discrimination.
Ac mi nistrative Law Judge (ALJ) Ray Fleischacker subsequently addressed this issue
at a conftbrence on October 7, 2002. This conference resulted after the Commission had
issued a notice on October 3, 2002 finding probable cause to credit the allegations in the
amended complaint and stating its law enforcement bureau’s intention to schedule the case
for public hearing and adjudication. ALJ Fleischacker ruled that the Commission needed to
prove a :onnection between Seafood King and Silver Dragon to proceed with Dana
Monroe’: allegations concerning the March 4,2002 incident. He recommended withdrawal
of her cla’magainst Silver Dragon with leave to the Commission to re-serve a new complaint
against S’lver Dragon for the alleged racial discrimination on July 15, 2002.
Tl e Commission thereafter filed a new verified complaint against Silver Dragon on
01shmt Drecemher 30.2002.
This c*oitqJl;ii 11t cmfincd itself to the July 15. ’2002incident and
reiterated the same Administrative Code violation footnoted above, but omitted any mention
5 8-102 (C.), in turn, pertinently provides that: “[tlhe term ‘place or provider of public
accommodation’ shall include providers, whether licensed or unlicensed, of goods, services,
facilities, accommodations, advantages or privileges of any kind, and places, whether licensed or
unlicensed, where goods, services, facilities, accommodations, advantages or privileges of any
kind are extended, offered, sold, or otherwise made available.”
4
[* 5]
of Dana Monroe or Seafood King4 Silver Dragon again submitted a verified answer denying
the allegctions of the complaint. An administrative hearing was held on February 12,2003
before A.,J Suzanne Christen of the New York City Office of Administrative Trials and
Hearings pursuant to a referral authorized by an applicable Commission rule.5
The Administrative Hearing and Post-Hearing Submissions
Dcputy Commissioner Mulqueen testified at the hearing that he saw white and Asian
customers pay for their meals when they received their food. He then related that the person
at the counter handling Ms. Holder-Winfield’s order directed her to pay when she placed her
order and repeated “pay now” even after she told the worker that she wanted to pay when her
food arrived. Deputy Commissioner Mulqueen also testified that the same worker, after
taking hi: order, told him that he did not have to pay immediately for his food. He, in fact,
only paid, according to his testimony, when the food arrived. Ms. Holder-Winfield confirmed
this scenario. She testified that she too saw white and Asian patrons pay upon receiving
their fooi. She added that the same worker who served these other customers asked her to
4
The Commission eventually issued a notice of administrative closure on June 18,2003
which clo,<ed original complaint, discussed above, on the grounds, as summarized by the
the
Commission’s answer herein, that “( 1) Silver Dragm, was not in business at the time of
complainant Monroe’s allegation of discrimination, and (2) that the Commission had
subsequently initiated a new claim against Silver Dragon alleging that its staff was engaged in
discriminatory practices.”
Specifically, 47 RCNY 8 1-71(a) provides, in part, that: [wlhen the Law Enforcement
Bureau determines that a case is ready for adjudication, the Bureau shall refer the case to the
Office of Administrative Trials and Hearines (OATH) pursuant to this section.”
5
[* 6]
pay for her food immediately after she placed the order. He further remarked, “You pay now”
when she delayed, according to her testimony, but she replied that she wanted to pay for the
food upon receiving it. She recounted that the worker then escorted her to a table, but that
she returned to the cash register five minutes later and told the worker that she had decided
to take 01 t her food, rather than eat it in the restaurant. He once again told her “You pay
now.” She then paid and received her food.
Wong Char, the Treasurer and Secretary of Silver Dragon’s corporate owner,
testified _hat Silver Dragon never before faced discrimination charges and that he
investigated what happened on July 15,2002 after receiving the original written complaint
in August 2002. He learned that the employees at the take-out counter on July 15, 2002,
none managerial or supervisory, no longer worked for the restaurant and were then working
out of state. Mr. Char explained that the restaurant maintained two different types of menus,
a Dim Sum menu for displayed food which required no kitchen preparation and a take-out
menu which required the food to be cooked to order in the kitchen. Customers ordering from
the toke-ciit mcnu arc askcd for advnnsc payment besnusz food prcpmd to ordcr cannot bc
resold if tlie customer fails to pay for the food. Such non-payment, he testified, happens four
or five tines a week, often from people posing as customers who seek to use the restroom.
He claimed that this advance payment policy applied to everyone ordering from the take-out
menu. He surmised on cross-examination that an employee might not seek payment in
advance .vhen the employee could sell an order from a non-paying patron to another
6
[* 7]
customer. Mr. Char testified that he never spoke directly to the employee monitoring the
cash register that day, a relative of the restaurant’s manager, but the manager told Mr. Char
that no or c remembered what happened on that date.
Bc Ih sides made post-hearing submissions.
Silver Dragon argued that its
managemmt lacked knowledge of the alleged discriminatory conduct and, thus, should not
be held ;trictly liable.
The Commission’s law enforcement bureau responded that
“manage1nent’s lack of knowledge does not absolve Silver Dragon of liability” and urged the
ALJ to rxommend a $10,000 fine, as well as to direct the establishment of a nondiscrimin Atit m policy at the restaurant.
The ALJ’s Report and Recommendation
ALJ Christen subsequently issued her 11-page report and recommendation, dated
May 30, Z 003, which found that Silver Dragon “discriminated against an African-American
investigazor on July 15, 2002, by asking her to pay for her order before receiving it.” She
mentione 1that no dispute existed that Silver Dragon, as a restaurant, qualified as a “provider
n€p\l~l~~-
~ \ ~ ~ ~ i ~ ~ Ct~clr.[8-10? ~ ~ i A1,J e l i r i d c t i f o i l i d that
i i i ~3 i . ~ (9\.6~ ~ r
the Comr lission had made a prima facie case based on the credible and unrebutted testimony
presentec which needed no showing of discriminatory intent.’ She explained that such
See footnote 3, second paragraph, above.
’
Her report cited Hudson Transit Lines, Inc. v State Human Rights Appeal Bd., 47
NY2d 97 which noted that: “[ilt is not always necessary to find specific evidence of spoken
references to complainants’ national origin or color, for acts of discrimination may occur without
such references” (id. at 972).
7
[* 8]
“discrimLiatory intent is presumed once petitioner establishes a prima facie case, and the
burden sf ifts to [Silver Dragon] to articulate a legitimate, non-discriminatory reason for
treating Ms. Holder-Winfield differently from other restaurant patrons. See McDonneZZ
Douglas Corp. v. Green, 41 1 U.S. 792,802-03,93 S. Ct. 1817,1824 (1973).” She found that
Silver Dragon failed to meet that burden. She reasoned that ordering from the Dim Sum
menu which required no kitchen preparation and no advance payment might plausibly
explain “why the two patrons ahead of Ms. Holder-Winfield were not asked to pay in
advance of receiving their orders, [but] it does not explain the disparity in the treatment given
to Ms. Holder-Winfield and Deputy Commissioner Mulqueen.” Both of them had placed
virtually the same food order requiring kitchen preparation.’
Allowing Deputy
Commissioner Mulqueen to wait to pay, ALJ Christen found, “is not satisfactorily explained
by Mr. Char’s speculation that the employee or agent who took his order would have figured
that the eirlier order from Ms. Holder-Winfield could be given to him if she did not pay for
it, becawe there is no evidence that her earlier order was ever placed with the kitchen.”
Instead, t I report reminds the parties that Ms. Holder-Winfield “had to pay in advance for
:
her kitchen order to go through.” ALJ Christen therefore concluded that Silver Dragon
“failed to articulate a legitimate, non-discriminatory reason for requiring Ms. HolderWinfield to pay in advance for her food.”
Deputy Commissioner Mulqueen testified to ordering General Tsao’s chicken and
Ms. Holdl*r-Winfield
testified to ordering General Tsao’s chicken and an egg roll.
8
[* 9]
Or e instance of discrimination, alone, ALJ Chisten’s report observed, suffices to
sustain a human rights violation.’ In addition, the report rejected Silver Dragon’s attempt to
argue that it had no knowledge of the alleged discriminatory conduct and could thus invoke
the strict 1:abilityaffirmative defense available under Administrative Code 8 8-107 (1 3) (b).”
The report explained that Silver Dragon “may not avail itself of the affirmative defense
provided ior in section 8-107(13) (b) because, under section 8-107 (13) (a) of the Code:
An employer shall be held liable for an unlawful discriminatory
practice based upon the conduct of an employee or agent which
is in violation of any provision of this section other than
subdivisions one and two o this section (emphasis added). . .
f
Here, [Silver Dragon] is charged with a violation of subdivision four, for which the
affirmative defense is not available.” Consequently, ALJ Christen found the verified
complaim proven and recommended, as requested by the Commission’s law enforcement
9
ler report cited Imperial Diner, Inc. v State Human Rights Appeal Bd., 52 NY2d 72 in
noting that Executive Law 8 296, the state law equivalent to the New York City Human Rights
Law: “prombits discrimination, and not just repeated discriminatory acts . . . [I’jhe commissioner
could find that petitioners engaged in an unlawful discriminatory employment practice which
should be ~edressed.He did not have to also find that this was a regular practice, nor did he have
to wait and see if it would become one.”
lo That provision provides, in part, that: “[aln employer shall be liable for an unlawful
discriminatory practice based upon the conduct of an employee or agent which is in violation of
subdivisio t one or two of this section only where: (1) the employee or agent exercised
manageria or supervisory responsibility; or (2) the employer knew of the employee’s or agent’s
discriminatory conduct, and acquiesced in such conduct or failed to take immediate and
appropriat::corrective action . . . or (3) the employer should have known of the employee’s or
agent’s discriminatory conduct and failed to exercise reasonable diligence to prevent such
discriminatory conduct.
9
[* 10]
bureau, that Silver Dragon “implement a policy against discrimination, and train its
employees to comport themselves in a manner consistent with that policy.” However, she
recommended a civil penalty of $2,000, not $10,000 as the law enforcement bureau had
urged, in view of “undisputed mitigating evidence of no complaints of prior or subsequent
discriminatory conduct towards patrons of the Silver Dragon Restaurant . . .
9,
The Post-Report and Recommendation Submissions
Both sides then accepted the invitation of the Commission’s General Counsel to submit
comments to the Commission concerning the report and recommendation. The Commission’s
law enforcement bureau agreed with the violation findings, took the “position that respondent’s
treatmen’ of the African-American tester was deliberate” and chastised Silver Dragon for
“deliberate and malicious conduct.” It referenced other Commission decisions and particularly
d
highlight : Southgate v UnitedAfricanMovement, NYCCHR Compl. No. MPA95-0031, Rec.
Dec. & Ord. (June 30, 1997), Decision & Ord. (Sept. 24,1997 ) in which a $5,000civil penalty
had been imposed. In that case, a Caucasian reporter had been barred from attending a publicly
rldv~rti.;t. fnnim. in vinl3tinn o f t h ~m x 4 8-1 07 (4). 8s involved herein. The Cm”issinn’s
I
s
decision observed, according to the law enforcement bureau, that: “Exclusion from [the]
forum does not impact the City’s interest in the same manner as race-based exclusions from
. . . public accommodation where commercial transactions take place.” Hence, the law
enforcen cnt bureau contrasted the Southgate decision “where racial exclusion was less
egregious because it occurred outside of a commercial context” with “the case at hand [which]
10
[* 11]
exemplifies a greater impact upon the City’s interest because [Silver Dragon’s] act of
discriminatit in occurred in a public accommodation where commercial transactions take place.
Thus, the discrimination has a detrimental effect upon customers.” The law enforcement
bureau ended its submission by stating that: “[tlhe Commission is therefore respectfully urged
to modify the recommended decision to the amount of $5000.00 in order to protect the rights
of the puldic.”
Si‘ver Dragon’s opposition to the law enforcement bureau’s submission stated that the
offendink employee no longer worked at the restaurant and that management had taken
correctivr : measures after notice of the charges. The opposition statement characterized the
case as presenting an isolated incident of discrimination. Silver Dragon viewed the ALJ’s
recommended penalty of $2,000 as excessive, but agreed to “honor her decision in this matter.”
The Commission’s Determination
TI le Commission thereafter issued its decision and order, dated July 28, 2003, which
found ALJ Chnsten’s report and recommendation supported by the record. It regarded the
recommcndation for implcmcnting an anti-discriminatinn policy with training as appropriate
affirmative relief. However, the Commission believed “that the circumstances of this case
warrant rtie imposition of a civil penalty in the amount of $10,000.’’ The Commission,
following its law enforcement bureau’s argument, commented that “Discrimination based on
race by
I
place of public accommodation where commercial transactions take place is
particula ‘ly egregious.” The decision recounted that an investigator “was subjected to the
11
[* 12]
presumpt:on that solely because of her race, she was less trustworthy than [Silver Dragon’s]
non-Afric ;in-American customers.” The filing of this case after a Commission-initiated test,
the decision continued, made it “reasonable to assume that [Silver Dragon], as a matter of
policy, tre2tcd African-American customers in this manner.” Conscquently,the decision stated
that “[tlhc indignity that the investigator and other African-American customers suffered as
a result of [Silver Dragon’s] raw bigotry is precisely why the [Administrative] Code provides
for the i nposition of civil penalties to vindicate the public interest.” Therefore, the
Commission adopted ALJ Christen’s report and recommendation, but modified the civil
penalty aspect by ordering Silver Dragon to pay $10,000.
Petitioner’s Position
In its petition, petitioner challenges the Commission’s $10,000 civil penalty as both
unwarranted and excessive. It disputes the Commission’s assumption that a policy existed to
discriminatorily treat African-American customers. Silver Dragon views the July 15, 2002
incident as an isolated error of judgment marring its otherwise unblemished record and urges
either t 1111 thc civil penalty he vacated in its entirety as impermissible under Administrative Code
12
[* 13]
8-107 (13) (f)” or that it be modified by applying the mitigating factors cited in Administrative
Code $0 E-107 (13) (d) (2)12and 8-107 (13) (e).13
Respondents ’ Position
Respondents assert that the evidence supports the Commission’s determination that Silver
Dragon discriminated against African-American customers. They regard the civil penalty
imposed as reasonably related to Silver Dragon’s discriminatory conduct and within the
Commiss:on’s broad authority. They also assert that Silver Dragon improperly filed its petition
as an Article 78 proceeding.
I’
That provision provides, in part, that: “[tlhe commission may establish by rule,
policies, programs and procedures which may be implemented by employers for the prevention
and detection of unlawful discriminatory practices by employees, agents and persons employed
as independent contractors. Notwithstanding any other provision of law to the contrary, an
employer found to be liable for an unlawful discriminatory practice based solely on the conduct
of an employee, agent or person employed as an independent contractor who pleads and proves
that such policies, programs and procedures had been implemented and complied with at the time
of the unl;lwf~11
conduct shall not be liable for any civil penalties which may be imposed pursuant
to this chi pter . . .”
That provision provides that: “[wlhere liability of an employer has been established
pursuant to this section and is based solely on the conduct of an employee, agent, or independent
contractor, the employer shall be permitted to plead and prove that prior to the discriminatory
conduct for which it was found liable it had: (2) A record of no, or relatively few, prior incidents
of discriminatory conduct by such employee, agent or person employed as an independent
contractor or other employees, agents or persons employed as independent contractors.”
l 3 That provision provides, in part, that: “[tlhe demonstration of any or all of the factors
listed above in addition to any other relevant factors shall be considered in mitigation of the
amount 0’civil penalties to be imposed by the commission pursuant to this chapter . . .”
13
[* 14]
Discussion
Procedurul Aspects
Respondents correctly indicate, as a procedural matter, the inapplicability of CPLR article
78 to this case. CPLR 7801 (1) provides, in part, that: “[elxcept where otherwise provided by
law, a prc cecding under this article shall not be used to challenge a determination: which . . . can
be adequ: ttely reviewed by appeal to a c-ourt. . .” Here, Administrative Code 0 8- 1 2314expressly
provides . or the Supreme Court’s exclusivejurisdiction to initially review Commission orders and
thus supplants CPLR Article 78.
“Where, as here, an exclusive review procedure by a specified court is expressly provided
for by st: tute, a proceeding under article 78 is not maintainable” (Malofsv City Commission on
Human Rights, 45 AD2d 834,834). “Thus, under Code 8 8-123, in the first instance this court has
exclusive jurisdiction of the issues in this proceeding” (City of New York Commission on Human
Rights v Salinas Realty Corp., 183 Misc 2d 897, 898). “[Tlitle 8 of the New York City
Administrative Code provides a special mechanism for judicial review of decisions made by [the
14
Subdivision (a) of that provision pertinently provides that: “[alny complainant,
respondent or other person aggrieved by a final order of the commission issued pursuant to
section 8-120 or section 8-126 of this chapter. . . may obtain judicial review thereof in a
proceedin: as provided in this section.
Subdivision (b) of that provision pertinently provides that: “[sluch proceeding shall be
brought in the supreme court of the state within any county within the city of New York wherein
the unlaw-ul discriminatory practice or act of discriminatory harassment . . . occurs . . .”
Subdivision (f) of that provision pertinently provides that: “[tlhe jurisdiction of the
supreme cour,t shall be exclusive and its judgcment and order shall be final, subject to review by
the appell L division of the supreme court and the court of appeals in the same manner and with
t
e
the same effect as provided for appeals from a judgement in a special proceeding.”
14
[* 15]
City] Huruan Rights Commission. Thus, section 123 (b) gives this court exclusive jurisdiction to
hear proceedings commenced by persons aggrieved by a final order of the Human Rights
Commiss-on,subject only to review by the Appellate Division and the Court of Appeals” (Rodriguez
v New York City Commission on Human Rights, Sup Ct, NY County, February 14,2003, Madden,
J., Index No. 400790/02). “[Alny application for judicial review of a final order of the NYCCHR
must be brought pursuant to [Administrative Code 0 8-1231” (Matter of United African Movement
v New York City Commission on Human Rights, NYLJ, March 9, 1999, at 25, col 1).
Here, Silver Dragon has incorrectly proceeded under CPLR Article 78. However, the
conversion of such proceeding, pursuant to CPLR 103 (c),’~
into a review proceeding under
Administrative Code 8 8- 123 represents an appropriate remedy considering that jurisdiction over
the parties exists (New York City Commission on Human Rights v Pathmark Stores Inc., NYLJ,
October 3 , 1999, at 28, col 5 [special proceeding pursuant to CPLR Article 4 converted to
enforcement action under Administrative Code 8- 125 (b) regarding civil penalty for discriminatorily
denying c‘ccessto a public accommodation]). In addition, no issue of timeliness, attributable to the
shorter stitntc‘ of limitations in Adminiqtrative Codc 3 8-123 (h),16 exists in this case.”
l5
That provision pertinently provides that: “[ilf a court has obtained jurisdiction over
the parties, a civil judicial proceeding shall not be dismissed solely because it is not brought in
the proper form, but the court shall make whatever order is required for its proper prosecution.’’
l6
That provision provides that: “[a] proceeding under this section must be instituted
within thirty days after the service of the order of the commission.”
Here, Silver Dragon initiated this proceeding, as mentioned earlier, by first filing an
order to show cause on August 22, 2003 and then a notice of petition, petition and supporting
papers on A u p s t 28,2003. These filings followed the Commission’s decision and order, dated
July 28,2Q03. Neither side mentions when and how service of the decision and order was made
15
[* 16]
Discrimination Finding
Silver Dragon, does not object to the evidentiary support for the Commission’s determination
that discrimination, as found by ALJ Christen, occurred against an African-American investigator
on July l:, 2002 by asking her to pay for her order before receiving it. Instead, Silver Dragon cites
Adminishative Code
8 8-107 (f) and argues, in essence, that its alleged implementation of
Commisslon policies, programs and procedures to detect its workers’ unlawful discriminatory
practices should enable it to avoid any civil penalty, as that law allows.’*However, Silver Dragon
neither pl :aded nor proved such implementation or compliance, as that law also requires.” Indeed,
its verified answer before the Commission regarding the July 15,2002 incident simply denied the
allegatior s of the complaint and contained no affirmative defenses. Even more significantly, ALJ
Christen’s report and recommendation contains no finding that Silver Dragon implemented or
complied with Commission policies, programs and procedures. The report simply notes Mr. Char’s
testimony that “[hle instructs any employee that he hires to treat everyone equally” [and] “that his
policy has always been to treat everyone the same.” The only favorable finding regarding Silver
DraSon sLJtcsthat: “it has not hnd m y prim- complaints of discriminntion.” Hence. Silver Dragon
fails to qualify for avoidance of a civil penalty after having been found liable for its worker’s
unlawful discriminatory practice.
but, even nore significantly, respondents raise no timeliness defense.
l8
See fn. 11.
l9
Id.
16
[* 17]
Silver Dragon’s post-hearing submission and post-report and recommendation submission
made no objection based upon Administrative Code 0 8-107 (13) (f). Consequently, pursuant to
Adminisb ative Code 0 8- 123 (c), it may not be considered by this court .*O
Propriety of the $10,000 C v l Penalty
ii
A1 :bough Silver Dragon was directed to implement an anti-discrimination policy with
attendant training, the amount of the civil penalty presents a thornier issue. Three prior Commission
cases imposing civil penalties and their subsequent judicial review in two instances show that the
propriety of the amount of the penalty is determined by “examin[ing] how egregious the violation
is and its impact on the public.”*’
For example, the Commission adopted the recommended decision and order of the Chief ALJ
in Southdate v United African Movement, NYCCHR Compl. No. MPA95-085 1PA95-003 1, and
imposed 1 $5,000 civil penalty where a respondent had barred a Caucasian reporter from attending
a publicly advertised forum because of her race. There, the Chief ALJ had written that “[e]xclusion
from Respondents’ forums does not impact the City’s interest in the same manner as race-based
exclusioi 3 from housing iicc*cmiiiid:ii ioiw, ciiiploymcnt opportunities or puhlic accommodations
where co nmercial transactions take place.” However, the Chief ALJ recognized that “some amount
2o That provision provides, in part, that: “[nlo objection that has not been urged before
the commission shall be considered by the court, unless the failure or neglect to urge such
objection shall be excused because of extraordinary circumstances.”
21
Southgate v United African Movement (Sup Ct, N Y County, Index No. 10169/98),
Rec. Dec. & Ord., p 33. The omission of the administrative ruling cited by respondents herein
caused thi: court to independently review that court file.
17
[* 18]
of civil penalty is appropriate” and, in imposing the $5,000 penalty, commented that ‘[tlhe extreme
nature of the] exclusionary actions and blatant race-based criteria cannot be ignored. Moreover,
the enforcement of this [exclusionary] policy was so extreme that a [Law Enforcement] Bureau
tester was manhandled by Respondents [therein] as he was ‘escorted’ from the Slave One Theater.”
Aggravating factors in a commercial contexl resulted in civil penalties of $5,000 and
$20,000, respectively, against a landlord and brokerage firm in Smith v Park West Realty, NYCHHR
Compl. No. MH-93-0877.22 There, the Commission adopted the recommended decision of ALJ
Steven E. Presberg, who found that the landlord had purposely instructed the brokerage firm to
utilize a rice-coded restriction on the landlord’s apartment listings. This coding implemented his
instructiolis not to bring blacks or Hispanics to see an apartment. The landlord had also refused to
show an available apartment to a black woman when she appeared for a scheduled appointment.
The ALJ urther mentioned the brokerage firm’s pattern of discrimination against blacks, Hispanics
*
and others over an extended period of time. He referred to rental listings and notations of “no
children” and “no doctors, no lawyers” on many firm rental forms to establish this discriminatory
pattern. ‘l’hc size of the brokcragc?firm, which includcd at least five sakspersnns and the broker,
coupled with the duration of the race-based coding scheme and the notations on numerous
22 The omission of this administrative ruling, referred to by the Commission’s law
enforcement bureau in its submission to the Commission, and the ensuing judicial review noted
in Chief !L Maldonado’s Southgate opinion, cited by respondents herein, caused the court to
.J
independc i itly review the court file containing the actual administrative ruling, Rosenshein dba
Park Wes Realty v New York City Commission on Human Rights (Sup Ct, Kings County,
1548 1/95,.
18
[* 19]
documenti, led the ALJ and the Commission to conclude that the discriminatory policy affected a
large nurrber of potential renters.
A P cview proceeding in the Park West Realty case upheld those civil penalties.23However,
the subsequent Appellate Division decision in 119-121 East 97”’ Street Corp. v New York City
Commission on Human Rights, 220 AD2d 79, reduced a $75,000 civil penalty to $25,000 by
“apply[in 51 a principle of proportionality since the Commission is precluded from assessing more
than $1OC ,000 as a civil penalty in any case.” There, the appellate court set forth the numerous acts
of harassment by landlords directed against an HIV-positive tenant, Mr. Baca, over an 18-month
period wliich led the Commission to find discrimination based upon sexual orientation and
disability:
[Pletitioners [i.e., the landlords] commissioned someone or acted
themselves to burglarize respondent’s [i.e., Baca’s] apartment, disabled
his door locks, and turned off his electricity. Petitioners refused to
accept his timely rent checks, refused to renew his lease, and
commenced eviction proceedings against respondent. Petitioners
verbally and physically accosted respondent Baca and encouraged their
employees to do so, including calling him, in public, a “faggot punk”,
“male whore”, and “sicko” telling him he had AIDS and they hoped he
died, leaving threatening messages on his answering machine,
distributing a notice to tenants in respondent’s building informing them
of his Human Rights complaint and HIV status and warning the tenants
not to cooperate with him. . . . Petitioners telephoned or had someone
telephone respondent’s employer . . . and divulged his HIV status (id.
at 82-83).
23
Id., Memorandum Decision at 10-11.
19
[* 20]
The appellate decision upheld an award of $loO,O00 for mental anguish to the tenant for these acts,
but noted that the civil penalty “is not intended to compensate the complainant but to punish the
violator” ;id.at 88). The decision observed that the 50 units owned by petitioners failed to place
them “in the upper range of units owned by large landlords in the City” (id.).Consequently, “while
their acticns were egregious, committed over a period of time, and implicated individuals besides
complainant, the public interest was not affected to the much greater extent it would have been had
petitioners been large landlords whose actions affected hundreds, if not thousands of individuals’’
(id.at 88-89). Utilizing the proportionality principle and considering that no previous findings of
discriminition existed against those petitioners, the appellate court reduced by two-thirds the
Commission’s civil penalty which the Supreme Couri had allowed.
Using the Appellate Division’s proportionality analysis means determining whether the
Commission ultimately imposed a civil penalty commensurate with the infraction. The limited prior
administrative and judicial case law, discussed above, involved either extensive discriminatory
conduct over an extended period of time or other aggravating factors. Documentary evidence in the
I m V’CL? Rmlty casc, for cxmplc, indicated thp broad scope 3nd entrenched nstrire of the racial
‘?
coding alddother discriminatory activities in that case. In addition, the ALJ carefully analyzed the
civil penidties in the context of the Cornmission’s $75,000 award in the Baca case, which included
“some of the most willful, wanton and malicious conduct ever scrutinized by this tribunal.”24
However, neither the ALJ, the Commission or the reviewing court in that case had the benefit of the
24 Rosenshein dba Park West Realty v New York City Commission on Human Rights
(%ip Ct, Kings County, 15481/95), Rec. Dec. & Ord., p 36.
20
[* 21]
appellate decision in the Baca case, sub nom 119-121 East 9Th Street Corp. v New York City
Commission on Human Rights, 220 AD2d at 88-89 which reduced the $75,000 civil penalty by twothirds to $25,000. Utilizing the $25,000 figure and two-thirds reduction as a guide suggests that a
penalty of about $6,650 --- two-thirds of$20,000---might have resulted in the Park West Realty case
by a literal application of the proportionality analysis made in the Baca case.
Chief ALJ’s Southgate opinion and the Commission’s resulting decision and order,
referenced above, occurred after the appellate decision in Baca, and imposed a $5,000 fine in a noncommerc‘al case, as respondents mention. However, the manhandling of a Commission law
enforcem mt bureau tester in enforcing the exclusionary policy significantly contributed to the
amount o ’ this civil penalty.
Here, Silver Dragon’s proven discriminatory action, while intolerable, clearly differs from
the litany of severely hostile discriminatory acts found over a period of time in the Baca case, the
documented discriminatory scheme, again over an extended period of time, in the Park West Realty
case and the overt manhandling that occurred in the Southgate case.25 Indeed, perhaps after
recognizing these differenccs, the Commission’s nwn law enforcement h r e a u . “charzed with the
Commission’s investigatory and prosecutorial functions,”26
revised its $10,000 recommendation to
ALJ Christen in this case to a subsequent $5,000 recommendation to the Commission. The law
25 Those cases, like this one, at least involve the similarity of no previous findings of
discrimination.
26
47 RCNY
0 1-02 (a).
21
[* 22]
enforcement bureau’s revised recommendation, in any event, represented a substantial percentage
increase over ALJ Christen’s recommended $2,000 civil penalty.
Administrative Code 0 8- 105
empowers the Commission to adjudicate discrimination
complaints and Administrative Code 0 8-126 (a)28places responsibility with the Commission for
imposing a civil penalty. Although the Commission had the right to reject the law enforcement
bureau’s recommendation, just as it can modify the ALJ’s recommendation, the circumstances in
this case warrant a penalty in an amount different from the $10,000 imposed by the Commission in
its decision of July 28,2003.. The prevailing principle of proportionality makes $5,000, more than
double the ALJ’ s recommendation, appropriate under the facts herein.
Accordingly, the court, sua sponte, converts Silver Dragon’s CPLR Article 78 proceeding
into a review proceeding under Administrative Code 0 8-123 and grants Silver Dragon’s petition
to annul or modify the decision and order of respondent Commission, dated July 28,2003, only to
the exten- of reducing the civil penalty against Silver Dragon from $10,000 to $5,000.
Respondents’ cross petition to enforce the challenged relief in the Commission’s decision and
27
That provision pertinently provides that the Commission shall have the: “power to
determine that a respondent has engaged in an unlawful discriminatory practice and to issue an
order for such relief as is necessary and proper . . .”
28
See fn. 2.
22
[* 23]
order is gimted, except to the extent of reducing the civil penalty against Silver Dragon to
$5,000.
The foregoing constitutes the decision, order and judgment of this court.
ENTER,
I
J. S. C.
23
