New York State Rest. Assn. v New York City Dept. of Health & Mental Hygiene

[*1] New York State Rest. Assn. v New York City Dept. of Health & Mental Hygiene 2004 NY Slip Op 51290(U) Decided on October 27, 2004 Supreme Court, New York County Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on October 27, 2004
Supreme Court, New York County

NEW YORK STATE RESTAURANT ASSOCIATION; EIRE ENTERPRISES, INC. d/b/a CAVALIER; CINO'S RESTAURANT, INC., d/b/aCINO'S RESTAURANT; 513 JJT CORP. d/b/a WEST; TREL REST. INC. d/b/a ROSIE O'GRADY'S; 222 EAST 58TH STREET ASSOCIATES, INC., d/b/a ANCHE VIVOLO; TIMES SQUARE ENTERTAINMENT GROUP, LLC d/b/a B.B. KING BLUES CLUB & GRILL; JCLG WALL ST. INC. d/b/a BRAVO PIZZA; THIRD AVENUE BROTHER JIMMY'S LLC d/b/a BROTHER JIMMY'S; VARRICK GROUP LLC d/b/a BUTTER RESTAURANT; MERISSA RESTAURANT CORP. d/b/a CAFFE ON THE GREEN; DENNIS FENEZIA d/b/a CARVEL ICE CREAM STORE No.1012; SMALL FEAST CATERERS INC. d/b/a CUCINA RESTAURANT; STATION'S PUB FIRST EDITION d/b/a FIRST EDITION; 345 COURT STREET CORP. d/b/a MARCO POLO RISTORANTE; SURF AVENUE RESTAURANT CORP. d/b/a MCANN'S; PETER'S WATERFRONT BEER PUB, INC. d/b/a/ PETER'S WATERFRONT; PARADISO 2000, INC. d/b/a PIZZA PARADISO; R.G.T. RESTAURANT CORP. d/b/a PUNCH; TEPOZ LLC d/b/a SALON MEXICO; SIRICO'S RESTAURANT & CATERING, INC. d/b/a SIRICO'S RESTAURANT; SOHO ROBATA d/b/a TENESSEE MOUNTAIN; 269 COLUMBUS RESTAURANT INC. d/b/a THE CITY GRILL; FISHTANK OPERATING, INC.d/b/a TIME CAFé; CALSHEA RESTAURANT CORP. d/b/a TRIPLE CROWN RESTAURANT & ALE HOUSE; 240 WEST FOOD CORP. d/b/a VERONICA'S RESTAURANT; SAM'S 2ND AVENUE ALE HOUSE, INC. d/b/a WATER FRONT ALE HOUSE; ZOCALO & GRAND CENTRAL LLC d/b/a ZOCALO/GRAND CENTRAL, , Petitioners,

against

NEW YORK CITY DEPARTMENT OF HEALTH AND MENTAL HYGIENE; DR. THOMAS R. FRIEDEN, New York City Commissioner of Health and Mental Hygiene; ELLIOTT S. MARCUS, Assistant Commissioner, Bureau of Regulatory and Environmental Health Services, Office of Field Operations/Inspections, New York City Department of Health and Mental Hygiene; ROBERT D. EDMAN, Executive Director, Office of Field Operations/Inspections, New York City Department of Health and Mental Hygiene; and MICHELLE ROBINSON, Director Bureau of Food Safety and Community Sanitation, New York City Department of Health and Mental Hygiene, Respondents.



102337/04

Edward H. Lehner, J.

The basic issue before the court in this proceeding is whether the new point system promulgated in connection with the inspection of food service establishments constitutes the enactment of a "rule" so as to have required compliance with the publication and public comment provisions of the New York City Administrative Procedure Act ("CAPA")(New York City Charter §1041, et seq.).

Petitioners The New York State Restaurant Association, a statewide not-for-profit organization of restaurant owners and operators, and twenty-eight New York City restaurant and food service operators, bring a petition before the court alleging that changes in inspection procedures made by respondent Department of Health and Mental Hygiene ("DOHMH" or the "Department") and embodied in a booklet entitled "Important Information for Food Service Establishments" (the "Booklet") are: (i) ultra vires; ii) in violation of lawful procedure; and (iii) arbitrary and capricious

In 2003, the Department published the Booklet which states that, as of March 24, 2003, it is "making some changes in its inspection procedures .... (and although) [n]one of the regulations applicable to food safety have changed ...., there will be a new method for scoring food service establishment inspections that better reflects the overall sanitary conditions of an establishment."

Some of the petitioners initially commenced an action in the United States District Court for the Eastern District of New York alleging that the new inspection procedures violated substantive due process under the Fourteenth Amendment, and further failed to comply with CAPA. United States Magistrate Judge Levy, in an order dated January 12, 2004, dismissed the substantive due process claim and declined to exercise supplemental jurisdiction over the state law claims. This petition was filed on June 3, 2004 and respondents do not raise an issue as to the timeliness of the proceeding.

The Booklet identifies as highlights of the changes that: "A point value will be assessed for each violation. A total of 28 or more points in [*2]either critical or general violations will be considered a failed inspection, which will then require a timely compliance inspection by DOHMH. "Each violation will be assigned a base point value. Additional points will be added to a violation, when necessary, to reflect the severity of the violation. This severity measurement factor is called 'conditions'. The more severe the violation, the greater the point value for that violation."Some of the violations that were previously categorized as General are now categorized as Critical. A, B, C, and D violation classifications will be eliminated" (emphasis in original).

The condition levels range from I to V, with condition I being the lowest and condition V being the highest. Critical violations, including food source, food protection, personal hygiene and food temperature, are assigned a point level of 5 to 7 for a condition I violation, escalating to a point level of 28 for a condition V violation. General violations relating to garbage, facility maintenance and documentation are assigned a point level of 2 for a condition I violation, escalating generally to a point level of 5 for a condition IV violation, although there are three identified general violations assigned a point level of 28 for a condition V violation. Previously violations were classified as critical (more serious) or general, and if an inspection resulted in four critical violations or five general violations, the food service establishment was subject to closure. Under the revisions set forth in the Booklet, a restaurant is subject to being closed when it is considered to have failed an inspection by having been assigned 28 points.

The New York City Charter (the "Charter") provides: §551(a) "There shall be a department of health and mental hygiene, the head of which shall be the commissioner of health and mental hygiene .... The department shall have and exercise all powers of a local health department set forth in law.§556"Except as otherwise provided by law, the department shall have jurisdiction to regulate all matters affecting health in the City of New York and to perform all those functions and operations performed by the city that relate to the health of the people of the city .... The jurisdiction of the Department shall include but not be limited to the following:a)"... (1) Enforce all provisions of law applicable in the area under the jurisdiction of the department for the preservation of human life, for the care, promotion and protection of health ....

The Charter also contains the following provisions establishing the Board of Health (the [*3]"Board"):

§553(a)"There shall be in the department a board of health, the chairperson of which shall be the commissioner. In addition to the chairperson, the board shall consist of ten members ...."

§558(b)"The board of health from time to time may add to and alter, amend or repeal any part of the health code, and may therein publish additional provisions for security of life and health in the city and confer additional powers on the department not inconsistent with the constitution, laws of this state or this charter, and may provide for the enforcement of the health code or any orders made by the commissioner or the board of health, by such fines, penalties, forfeitures and imprisonment as many be prescribed therein or otherwise by law."

(e)"Any violation of the health code shall be treated and punished as a misdemeanor.[FN1] The board of health or an administrative tribunal established by the board of health to enforce the provisions of the health code shall have the power to enforce its final decisions and orders imposing pecuniary penalties as if they were money judgments .... Nothing herein contained shall be construed to limit or abridge the board's or the department's right to pursue any other remedy prescribed by law ...."

Section 1043(a) of the Charter provides that "Each agency is empowered to adopt rules necessary to carry out the powers and duties delegated to it by or pursuant to federal, state or local law", and subsections (b) and (d) thereof set forth procedures for adopting rules by providing for the publication of the proposed rule and allowing an opportunity for public comment . Charter §1041(5) sets forth the following definition of a "rule":

a."'Rule' shall include, but not be limited to, any statement or communication which prescribes i) standards which, if violated, may result in a sanction or penalty; (ii) a fee to be charged by or required to be paid to any agency; (iii) standards for the issuance, suspension or revocation of a license or permit ....

b."'Rule' shall not include any (i) statement or communication which [*4]relates only to the internal management or personnel of an agency which does not materially affect the rights of or procedures available to the public; (ii) form, instruction, or statement or communication of general policy, which in itself has no legal effect but is merely explanatory; (iii) statement or communication concerning the allocation of agency resources or personnel ...."

The New York City Health Code (the "Code"), which is enacted by the Board [§558(b)], provides that: "The Department may inspect any premises, matter or thing within its jurisdiction, including but not limited to any premises where an activity regulated by this Code is carried on ...." (24 RCNY Health Code §3.01). Article 81 of the Code provides for inspection of food service establishments; §7.01 provides for an administrative tribunel to hear and determine violations charged by the Deprtment; and §3.12(a) provides:

"(A)ny person who is determined to have violated this Code or any other applicable law or regulation, or who holds, or is required to hold, a permit from the Board or the Commissioner or who is registered, or required to be registered, with the Department shall be subject to a fine, penalty and forfeiture of not less than two hundred and not more than two thousand dollars for each violation of a provision of this Code or any other applicable law or regulation relating to such businesses, trades, occupations and other activities. Each such violation shall be a separate and distinct offense, and in the case of a continuing violation, each day's continuance thereof shall be a separate and distinct offense."

Petitioners allege that the new inspection procedures set forth in the Booklet are "rules" that significantly alter the process of restaurant inspection and violation enforcement; that the Department has increased fines following the Booklet's issuance as a means of encouraging greater compliance with food safety practices and for the purpose of raising revenue; and that violations issued by inspectors are placed on the Department's web site and are thereby able to be viewed by the public. Petitioners contend that since these changes can only be properly adopted by issuance of new rules by either the Board or by the Department following the notice and comment procedure prescribed by CAPA, the new procedures were not properly adopted and are thus unenforceable.

Respondents assert the new inspection procedures are internal guidelines to inspectors, that they do not change the standards for food service establishments, do not impose new penalties, and are therefore not "rules" under CAPA. They contend that the Booklet informed the food service establishments of changes in the inspection procedures, but did not change any of the health standards set forth in the Code.

"(O)nly a fixed general principle to be applied by an administrative agency without regard to other facts and circumstances relevant to the regulatory scheme of the statute it administers constitutes a rule or regulation required by New York Constitution article IV, §8 to be filed in the office of the Department of State". [Matter of Roman Catholic Diocese of Albany v. New York State Department of Health, 66 NY2d 948, 951 (1985).] In DeJesus v. Roberts, 296 AD2d 307, [*5]310 (1st Dept. 2002), the court in applying the foregoing standard to CAPA, stated that the "rulemaking processes is mandated when an agency establishes precepts that remove its discretion by dictating results in particular circumstances", and concluded that "the process for deciding whether a City-owned building should be centrally managed or placed in an alternative management program ... is broadly discretionary (as) [m]any of the determinative factors are subjective or imprecise". See also, 439 East 88 Owners Corp. v. Tax Commission of the City of New York, 307 AD2d 203 (1st Dept. 2003).

"Rulemaking, in other words, sets standards that substantially alter or, in fact, can determine the result of future agency adjudications .... In contrast, agency penalty guidelines that 'vest inspectors with significant discretion, and allow for flexibility in the imposition of penalties, all with the view of imposing the appropriate sanction for the individual offense and offender in the particular case' are not rules under the State Administrative Procedure Act or the New York Constitution" [Matter of Alca Industries, Inc. v. Delaney, 92 NY2d 775, 778 (1999)]. However, "a rigid, numerical policy invariably applied across-the-board ... without regard to individualized circumstances or mitigating factors ... fall plainly within the definition of a rule for State Administrative Procedure Act purposes" [Matter of Schwartfigure v. Hartnett, 83 NY2d 296, 301 (1994)].

Coming to the case at bar, while a "rule" does not "include any statement or communication which relates only to the internal management ... of an agency ... or is merely explanatory" CAPA §1041 (5)(b)] (emphasis added), the new inspection procedures are not so limited. Rather, they "prescribe standards which, if violated, may result in a sanction or penalty (including the) suspension or revocation of a license" [CAPA §1041 (5)(a)]. The new inspection procedure with its point system is "a rigid, numerical policy invariably applied across-the-board ... without regard to individualized circumstances" [Schwartfigure v. Hartnett, supra, at 301]. While the court recognizes that an inspector, as a practical matter, may well in good faith exercise discretion in determining whether a condition truly warrants the issuance of a violation, there is nothing in the provisions set forth in the Booklet providing such authority when the condition found constitutes a violation of the Code. See also, Miah v. Taxi and Limousine Commission of the City of New York, 306 AD2d 203 (1st Dept. 2003); Singh v. Taxi and Limousine Commission of the City of New York, 282 AD2d 368 (1st Dept. 2001); 439 East 88th Owners Corp. v. Tax Commission of the City of New York, supra.

Petitioners also assert that only the Board can adopt new rules since "the Legislature intended the Board of Health to be the sole legislative authority within the City of New York in the field of health regulations" [Grossman v. Baumgartner, 17 NY2d 345, 351 (1966)]. However, the Charter provides that "the department shall have jurisdiction to regulate all matters affecting health in the City of New York" and to "enforce all provisions of law applicable in the area under the jurisdiction of the department"(§556). Thus, if properly adopted, the Department had the statutory authority to promulgate the inspection procedures and penalty point system set forth in the Booklet.

As stated by the undersigned in Association of Messenger Services v. City of New York, 136 Misc 2d 869 (Sup. Ct., NY Co. 1987), the CAPA provisions are "an example of a legislative desire to give the citizenry a voice in the operation of government" (p. 875). This voice was not provided to petitioners prior to the issuance of the Booklet. Therefore, the petition is granted and [*6]the court declares the new inspection and penalty point procedures set forth in the Booklet are "rules" which, under CAPA, could only be legally adopted by complying with the publication and public comment procedure set forth in §1043, and therefore were not validly adopted.

This decision constitutes the judgment of the court.

Dated: October 27, 2004_______________

J.S.C. Footnotes

Footnote 1: While the Charter states that any violation of the Health Code is a misdemeanor, that provision is not at issue herein. Regarding said provision, see: People v. Nemadi, 140 Misc 2d 712, 723 (Sup. Ct. NY Co. 1988).