Matter of Plainview-Old Bethpage Congress of Teachers v New York State Health Ins. Plan

[*1] Matter of Plainview-Old Bethpage Congress of Teachers v New York State Health Ins. Plan 2013 NY Slip Op 51357(U) Decided on August 5, 2013 Supreme Court, Albany County Lynch, J. 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 August 5, 2013
Supreme Court, Albany County

In the Matter of the Application of Plainview-Old Bethpage Congress of Teachers; TEACHERS UNIT OF PLAINVIEW-OLD BETHPAGE CONGRESS OF TEACHERS; CLERICAL UNIT OF PLAINVIEW - OLD BETHPAGE CONGRESS OF TEACHERS; MORTON ROSENFELD, as President of the Plainview/Old Bethpage Congress of Teachers and as President of the Teachers Unit of Plainview -Old Bethpage Congress of Teachers; and JANET RUTKOWSKI, as President of the Clerical Unit of Plainview-Old Bethpage Congress of Teachers, Petitioners/ Plaintiffs,

against

New York State Health Insurance Plan, NEW YORK STATE DEPARTMENT OF CIVIL SERVICE, PLAINVIEW-OLD BETHPAGE CENTRAL SCHOOL DISTRICT, as necessary party, the BOARD OF EDUCATION OF THE PLAINVIEW-OLD BETHPAGE CENTRAL SCHOOL DISTRICT, as a necessary party and DR. LORNA R. LEWIS, as Superintendent of the Plainview-Old Bethpage Central School District, as a necessary party, Respondents/, Defendants.



6860/2012



APPEARANCES:Richard E. Casagrande

Attorney for Petitioners/Plaintiffs

By: Ariana A. Gambella, Esq.

52 Broadway, 9th FloorNew York, New York 10004

Eric T. Schneiderman

Attorney General of the State of New York

Attorney for the State Respondents

By: Gregory J. Rodriguez, Esq.

The Capital

Albany, New York 12224

Guercio & Guercio LLP

Attorneys for the Respondent School District

77 Conklin Street

Farmingdale, New York 11735

Michael C. Lynch, J.

The petitioner Plainview-Old Bethpage Congress of Teachers Clerical Unit (hereinafter, CUPCT) is an employee organization that serves as the exclusive bargaining representative for a unit of clerical employees employed by the respondent Plainview-Old Bethpage School District (hereinafter, the District).The petitioner Plainview-Old Bethpage Congress of Teachers (POBCT) is an employee organization that serves as the exclusive bargaining representative for a unit of educators employed by the District.

The District and the CUPCT and the POBCT are parties to collective bargaining agreements that govern the terms and conditions of employment for members of each unit. The term of each agreement, originally July 1, 2006 to June 30, 2009, has been extended by a series of agreements to June 30, 2015 (Petition ¶ 25, District's Verified Answer ¶25, 26). As relevant to this dispute, the Agreements negotiated by and between the District and the CUPCT and the District and the POBCT each provide for a health insurance coverage and a health insurance buyout. Because the District is a "Participating Agency" (PA), the health insurance coverage is provided by the respondent New York State Health Insurance Plan (hereinafter, NYSHIP) and administered by the respondent New York State Department of Civil Service (hereinafter, the Department). The health insurance buyout benefit allows eligible employees to decline the NYSHIP health insurance coverage in exchange for a cash payment.Here, for example, the Collective Bargaining Agreements provided:

Any unit member shall have the option of dropping his/her health insurance coverage or changing said coverage from family to individual coverage. The exercising of the option referred to above shall be subject to the rules and regulations of the district's health insurance providers. A unit member who exercises his/her option to drop coverage shall receive 50% of the premium paid by the District for said coverage under the [certain] conditions"

(Exhibit E: CUPCT Agreement at Article V, §5; Exhibit F: POBCT Agreement at Article V, §7).

In furtherance of its obligation to administer NYSHIP, the Department's Employee Benefits Division issued and maintains a "Manual for Participating Agencies" (Exhibit A). With respect to the health insurance buyouts, the Manual provides that the benefit may be [*2]offered only for "those who have other coverage available to them" (Exhibit A, Section 3.1).

On September 28, 2011 the Department's Employee Benefits Division issued a revision to the Manual via a transmittal Memorandum that provided guidance with regard to "when an employee who elects to participate in a ...health insurance buyout program may enroll in NYSHIP" (Exhibit B - hereinafter Policy 122r1). Policy 122r1, which took effect immediately, provided, in relevant part, that PAs were to offer buyouts annually to those "who have other employer sponsored coverage".

On March 7, 2012, the Department issued a transmittal Memorandum announcing that, "effective immediately", for purposes of the health insurance buyout, "other employer sponsored coverage" meant, "coverage other than through NYSHIP" (Exhibit C - Policy No. 122r2). On May 15, 2012, the Department issued Policy 122r3 to "replace" Policy 122r2. More specifically, as relevant to this dispute, it provided that

"If a PA/PE has an existing buyout program that allows for the other coverage to be NYSHIP coverage, that program may be grandfathered until ... :

1. If the buyout program was established through collective bargaining, the first day of the plan year following the ratification of the new collective bargaining agreement;...

As relevant to this dispute, the practical effect of the policy announced on May 15, 2012 is that once the collective bargaining agreements expire, a member of either CUPCT or POBCT whose spouse has NYSHIP coverage may not take advantage of the health insurance buyout benefit.

Petitioner alleges that both CUPCT and POBCT are negotiating successor agreements to those that expired on June 30, 2009 (Petition ¶¶ 25, 38). According to petitioners, the only issue that remained between the negotiating parties was the health insurance buyout. During negotiations, the CUPCT and POBCT proposed that the existing buy out benefit be continued without change; the District proposed its elimination. According to petitioners, the District took the position that pursuant to Policy Memo 122r3, dated May 15, 2012, it is no longer permitted to offer the benefit to employees that rely on NYSHIP coverage as the "other employer sponsored coverage" (see Petition ¶¶ 29-30; 42-43). The respondent District advises that the parties most recent Memorandum of Agreements extend the terms of the existing Agreements through June 30, 2015 as follows:

The New York State Department of Civil Service's Memorandum of May 15, 2012, Number 122r3, purports to prohibit health insurance buyouts ... where a spouse is covered by NYSHIP. As a result the [District] demanded to remove the buy out benefit referred to in Memorandum Number 122r3, as applicable to NYSHIP enrollees, from the collective bargaining agreement (agreement). The union, ... was unwilling to agree to such removal and filed [the instant proceeding] to declare Memorandum Number 122r3 unlawful and for related relief. The union also filed a declaratory action before PERB (DR-130 and DR-131) seeking to declare such buy outs to be mandatorily negotiable notwithstanding Memorandum Number 122r3. The parties are not at impasse and stand ready to negotiate a health insurance buyout provision, but are awaiting the outcome of the litigation and the PERB declaratory action before doing so. [*3]

(Answer ¶¶ 25, 26)[FN1].

Accordingly, the parties have agreed to suspend negotiations and, notwithstanding the Memo, to continue the buy out benefit until January 2, 2014.

In this hybrid CPLR Article 78 proceeding/declaratory judgment action commenced on December 21, 2012, petitioners now assert seven causes of action against the respondents with respect to Policy Memo 122r3. In sum, the petitioners allege that (1) the Department and/or NYSHIP violated provisions of the Constitution, Executive Law, and the New York State Administrative Procedure Act governing rulemaking (First, Second and Third Causes of Action);(2) that the Department exceeded its statutory authority when it issued the Memo (Fourth Cause of Action); (3) that the Department's act was arbitrary and capricious because the policy treats employee's of PA's differently from State employees (Fifth Cause of Action); and, (4) that the Department issued the Policy in violation of the Taylor Law (Sixth and Seventh Causes of Action).Now before the Court is a motion by the State respondents (the Department and NYSHIP) to dismiss the proceeding as untimely [FN2].

Notwithstanding petitioners' characterization of their claims, the gravamen of their claim is a procedural challenge to the State respondents' quasi-legislative act, the adoption of Policy 122r3. In such a case, "the proper vehicle for such review is a CPLR article 78 proceeding and the four-month statute of limitations applies." (Capital Dist. Regional Off-Track Betting Corp. v New York State Racing and Wagering Bd., 97 AD3d 1044, 1045-46 [2012])."An article 78 proceeding must be brought within four months after the determination to be reviewed becomes final and binding upon the petitioner' (Best Payphones, Inc. v. Dep't of Info. Tech. & Telecomms., 5 NY3d 30, 34 [2005] [quoting CPLR 217(1)]). "An administrative determination becomes final and binding' when two requirements are met.... [f]irst, the agency must have reached a definitive position on the issue that inflicts actual, concrete injury and second, the injury inflicted may not be significantly ameliorated by further administrative action or by steps available to the complaining party'"

Walton v. New York State Dept. of Correctional Servs., 8 NY3d 186, 194 (NY 2007) [quoting Best Payphones, Inc., Id.).

Where, as here, a quasi-legislative administrative determination is being challenged, the Courts looks to the actual date that the policy was adopted and "its ready ascertainability" to determine when the statute of limitations begins to run (see Matter of Owners Comm. on Elec. Rates v Public Serv. Commn. of State of NY, 76 NY2d 779 [1990], revg on dissenting op of Levine, J., 150 AD2d 45, 51-54 [1989]).To determine when the statute of limitations began to run in this proceeding, the Court must determine (1) when the Department reached a definitive position that injured the petitioner; (2) when the Department's definitive position was readily ascertainable to petitioners; and (3) whether, at the point that the Department's position was [*4]readily ascertainable to petitioners, the injury could be "significantly ameliorated by further administrative action or by steps available to the petitioners" (Walton, Supra, Matter of Owners Comm. On Elec. Rates, Id; Matter of Riverkeeper, Inc. v. Crotty, 28 AD3d 957, 962 [2006]).

The State respondents bear the burden of establishing their statute of limitations defense (Matter of Richmond Med. Ctr. v Daines, 101 AD3d 1434, 1435 [2012]). Here, in support of the motion to dismiss, respondents argue that the challenged policy memo was issued on May 15, 2012 and that "petitioners were made aware of said policy memo by the respondent school districts". In support of the latter point, respondents rely on allegations in the petition wherein petitioners allege that they were advised of the policy memo during negotiations. Otherwise, petitioners do not specify how or when they were notified of the policy change. According to the State respondents the statute of limitations began to run on May 15, 2012, and thus this proceeding, filed on December 21, 2012, was untimely.

In response to the motion to dismiss, petitioner Morton Rosenfeld, president of the POBCT, submits an affidavit wherein he avers that the first he became aware of the Policy Memo during contract negotiations "on or about September 13, 2012" (¶ 9). On that day, he avers that he sent an e-mail to, among others, petitioner Janet Rutkowski, the President of the CUPCT to advise as to the District's position with respect to the buy out benefit.

In response to Mr. Rosenfeld's affidavit, the State respondents submit an affidavit by Mr. Dubois, the director of the Department's Employee Benefits Division [FN3]. He avers that after a Policy Memo is issued, it is mailed to the Chief Executive Officer of each affected Participating Agency, such as the School District here.He explains that the Memos are also posted online and that Union representatives, such as the New York State United Teachers (NYSUT), may request permission to access the online postings.Mr. Dubois also avers that petitioner's counsel wrote to the Employee Benefits Division in April and May 2012 with regard to Policy Memo 122r2 and that representatives from various unions, including NYSUT, attended a meeting held on May 1, 2012 with regard to Policy Memo 122r2.The State respondents apparently argue that the policy change with regard to "other employer sponsored coverage" took effect when Policy Memo 122r2 was issued on March 7, 2012 and that petitioners knew or should have known of such policy change as early as April 2012 or May 2012 when NYSUT was aware of the general policy change.

In this Court's view, respondents have failed to meet its burden of demonstrating that the petition is untimely. First, the Court does not agree with respondents that the operative policy for purposes of the statute of limitations was issued on March 7, 2012, inasmuch as that policy was expressly replaced by the May 15, 2012 policy. Notably, the May 15, 2012 Policy Memo provided that the changes to the buy out benefit would not apply where, as here, it was offered pursuant to an existing Collective Bargaining Agreement.

As set forth above, the Department's obligation here is to establish when the Department [*5]reached a definitive position with regard to the Health Insurance Buyout that injured the petitioner and that such definitive position was readily ascertainable to petitioners more than four months prior to the commencement of this proceeding.Respondents argue that NYSUT and the Districts were aware of Policy Memo 122r2, with the implication that ergo, petitioners were also aware of the policy. The Court recognizes that petitioners are two of more than twelve hundred local unions that are affiliated with NYSUT (Donnellan Affirmation ¶12). Respondents focus on notice to NYSUT is misplaced; the distinct question here is whether a definitive position was "readily ascertainable" to the petitioners, the parties in this proceeding. Even assuming that the Department's position was "readily ascertainable" to NYSUT, respondents do not establish that it was equally "readily ascertainable" to petitioners more than four months prior to the commencement of this proceeding.

Even if this Court were to find that petitioners were generally aware of Policy 122r3 as of May 15, 2012, the statute of limitations did not begin to run because arguably, the petitioners were not injured by the department's position. In this Court's view, Policy 122r3 does not, as respondents suggest, unambiguously provide that the health insurance buyout will cease to be a negotiable benefit. Indisputably, petitioners are entitled to negotiate the terms and conditions of their employment. As such, the policy did not inflict a "concrete injury" upon petitioners until they were advised during negotiations that due to Policy Memo 122r3, the District believed that the health insurance buy out was no longer a negotiable benefit (see e.g. New York State Ass'n of Counties v. Axelrod, 78 NY2d 158, 165 [1991]). Notably, review of the "Manual for Participating Agencies" confirms that the policies such as 122r3 are meant to be a "guide" and that some policies may be modified at the local level (Petitioners Exhibit A, Section 1.6).Here, the ambiguity with regard to the policy's impact on petitioners must be resolved against the State respondents to allow a determination on the merits (Mundy v. Nassau County Civil Service Com., 44 NY2d 352, 358 [1978]).

Based on the foregoing, the Court finds that this proceeding, commenced on December 21, 2012 is timely (cf. Matter of School Adm'r. Assn. of NY State v New York State Dept. of Civ. Serv., 2013 NY Misc. 1956 (NY Sup. Ct. May 9, 2013[Teresi, J.].

Accordingly, it is

ORDERED AND ADJUDGED that the motion to dismiss is denied; and it is further

ORDERED AND ADJUDGED that the State respondents shall submit an Answer to the petition within thirty days from the date of this Decision and Order.

This represents the Decision and Order/Judgment of this Court. This Original Decision and Order/Judgment is being returned to the Attorney General. The below referenced original papers are being mailed to the Albany County Clerk. The signing of this Decision and Order/Judgment shall not constitute entry or filing under CPLR 2220. Counsel is not relieved from the provisions of that rule regarding filing, entry, or notice of entry.

DATED:2013

Albany, New York

_________________________________

Hon. Michael C. Lynch

Justice of the Supreme Court

Papers Considered:

1.Notice of Verified Petition/Petition dated December 18, 2013, Exhibits thereto, [*6]Memorandum of Law in Support;

2.Verified Answer dated February 28, 2013, Affidavit sworn February 28, 2013 (Lewis);

3.Notice of Motion dated March 6, 2013, with Affirmation in Support (Gregory J. Rodriguez, Esq.), Affidavit and Memorandum of Law in Support;

4.Affirmation in Opposition dated April 5, 2013 (Ariana A. Donnellan, Esq.), Affidavit sworn April 2, 2013 (Morton Rosenfeld) and Exhibit thereto, and Memorandum of Law;

5.Reply Affidavit sworn April 15, 2013 (Robert Dubois), Exhibits thereto, Memorandum of Law;

6.Sur-reply Affirmation dated April 30, 2013 (Ariana A. Donnellan, Esq.), Surreply Brief;

7.Correspondence dated May 16, 2013(Rodriguez), Correspondence dated June 21, 2013 (Donnellan). Footnotes

Footnote 1:On June 18, 2013, the Public Employment Relations Board issued a Recommended Ruling wherein its Administrative Law Judge determined that the buy out was a mandatory subject of negotiations (PERB Case No. 201213-A-105).

Footnote 2:The District has filed an Answer and affidavit wherein it advises, inter alia, that it takes no position with respect to the merits of this proceeding.

Footnote 3: Petitioners correctly argue that it is improper to introduce new evidentiary material as part of a reply submission (Matter of Albany County Dept. of Social Servs. v. Rossi, 62 AD3d 1049 [2009]). Here, because petitioners sought and obtained an opportunity to submit a surreply the Court will consider all the submissions.