State of New York

Supreme Court, Appellate Division

Third Judicial Department

Decided and Entered: December 1, 2016 522621 

________________________________

In the Matter of EMPIRE WINE &

SPIRITS LLC,

Respondent,

v

MEMORANDUM AND ORDER

NOEL COLON, as Director of

Enforcement for the New 

York State Liquor Authority,

et al.,

Appellants.

________________________________

Calendar Date: October 18, 2016

Before: Peters, P.J., Garry, Devine, Clark and Aarons, JJ.

__________

Eric T. Schneiderman, Attorney General, Albany (Fredrick A.

Brodie of counsel), for Noel Colon and others, appellants.

Whiteman Osterman & Hanna, LLP, Albany (William S. Nolan of

counsel), for respondent.

__________

Garry, J.

Appeal from an order of the Supreme Court (Connolly, J.),

entered May 22, 2015 in Albany County, which, among other things,

granted petitioner's application pursuant to CPLR 2308 to compel

certain respondents to comply with subpoenas ad testificandum.

The State Liquor Authority (hereinafter SLA) charged

petitioner, a wine retailer, with 16 counts of improper conduct

pursuant to 9 NYCRR 53.1 (n) for shipping wine to customers in

states that prohibit their residents from receiving such

shipments. In support of its defenses, petitioner issued
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subpoenas ad testificandum to obtain the testimony of several of

SLA's senior officials, including SLA's general counsel,

respondent Jacqueline Flug; SLA's director of enforcement,

respondent Noel Colon; SLA's director of public affairs,

respondent William Crowley; and SLA's deputy commissioner of

licensing, respondent Kerry O'Brien. At the administrative

hearing, Colon and O'Brien refused to testify upon the advice of

counsel for SLA, respondents Mark D. Frering and Margarita

Marisco. Counsel for SLA further stated that Crowley and Flug

would likewise refuse to testify. The Administrative Law Judge

adjourned the hearing to permit petitioner to commence

proceedings to compel compliance with the subpoenas. Petitioner

then commenced a special proceeding pursuant to CPLR 2308 (b) and

401 to compel Flug, Colon, Crowley and O'Brien to comply with

petitioner's subpoenas. Respondents joined issue and cross-moved

for an order pursuant to CPLR 2304 quashing the subpoenas. 

Supreme Court granted petitioner's application and denied the

cross motion. Respondents appeal.1

Petitioner asserts that SLA has never before sought to

discipline a licensee for the conduct at issue, which is

allegedly consistent with industry standards and was acceptable

to SLA under its prior policies. According to petitioner, the

challenged subpoenas are intended to obtain information

pertaining to, among other things, SLA's past and present

policies regarding out-of-state shipping, the standards

applicable to the charges of improper conduct against petitioner

and evidence related to penalty mitigation. CPLR 2308 (b)

provides that, upon a motion to compel a respondent to comply

with a non-judicial subpoena, the court "shall order compliance"

if it determines that the subpoena was authorized. Here, it is

undisputed that petitioner was authorized by SLA's regulations to

issue the subpoenas (see 9 NYCRR 54.3 [h]; see also CPLR 2302

[a]). Respondents nevertheless contend that their motion to

quash should have been granted based upon their claims that the

1 Although all six respondents are named as appellants in

the notice of appeal, the appellants' brief was only filed on

behalf of Flug, Colon, Crowley and O'Brien (hereinafter

collectively referred to as respondents).
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information sought by the subpoenas is privileged, irrelevant,

beyond the scope of the administrative hearing, cumulative and

burdensome. We affirm, finding no abuse of Supreme Court's

discretion in the denial of respondents' cross motion (see

generally Matter of Kapon v Koch, 23 NY3d 32, 39 [2014]).

Turning first to the subpoena directed to Flug, respondents

claim that, given her role as SLA's general counsel, petitioner's

questions will necessarily elicit information protected by the

attorney-client privilege, which applies to "confidential

communication[s] made to [an] attorney for the purpose of

obtaining legal advice or services" (Matter of Comprehensive

Habilitation Servs. v Attorney Gen. of State of N.Y., 278 AD2d

557, 558 [2000] [internal quotation marks and citations omitted],

lv denied 96 NY2d 706 [2001]). However, although a subpoena

duces tecum can be vacated in advance on the basis of privilege,

a different analysis applies to a subpoena that seeks testimony

rather than documents (see Matter of Beach v Shanley, 62 NY2d

241, 248 [1984]). Where, as here, a witness has been served with

a subpoena ad testificandum, "a claim of privilege cannot be

asserted until the witness appears before the requisite tribunal

and is presented with a question that implicates protected

information" (Matter of Holmes v Winter, 22 NY3d 300, 319 [2013],

cert denied ___ US ___, ___ , 134 S Ct 2664 [2014]; see Matter of

Beach v Shanley, 62 NY2d at 248; 4-2304 Weinstein-Korn-Miller, NY

Civ Prac ¶ 2304.13). Flug is entitled to invoke the attorneyclient privilege if and when petitioner propounds questions that

implicate protected information, but we agree with Supreme Court

that she must first comply with the subpoena by appearing at the

administrative hearing. "Only in this context can an intelligent

appraisal be made as to the legitimacy of the claim of privilege"

(Matter of Pennock v Lane, 18 AD2d 1043, 1044 [1963]; see Desai v

Blue Shield of Northeastern N.Y., 128 AD2d 1021, 1022 [1987];

Ocean-Clear, Inc. v Continental Cas. Co., 94 AD2d 717, 718-719

[1983]).2

2 We reject respondents' argument that this Court should

impose a more rigorous standard due to Flug's role as SLA's

general counsel. This argument is premised upon federal and

trial court case law addressing efforts to compel the testimony
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Respondents' claims that the subpoenas seek irrelevant,

cumulative and otherwise improper information are likewise

premature. When no specific questions have yet been posed, an

objection on the basis of relevance is so speculative that

"[p]rophecy in such circumstances will step into the place that

description and analysis may occupy more safely" (Matter of Edge

Ho Holding Corp., 256 NY 374, 382 [1931]). Accordingly, "a

subpoena will be quashed only where the futility of the process

to uncover anything legitimate is inevitable or obvious or where

the information sought is utterly irrelevant to any proper

inquiry" (Matter of New York Temporary State Commn. on Lobbying v

Crane, 49 AD3d 1066, 1067 [2008] [internal quotation marks,

brackets and citations omitted]; see Matter of Hogan v Cuomo, 67

AD3d 1144, 1146 [2009]). 

Here, respondents have made no showing of utter

irrelevance, nor demonstrated that the information at issue will

be so completely outside the scope of the administrative hearing

that the subpoenas are obviously futile, particularly with regard

to petitioner's claims related to penalty mitigation and the

applicable standards. A similar analysis applies to respondents'

conjectural contention that testimony elicited from the four

officials may be cumulative to one another's testimony as well as

that already obtained from an SLA employee who testified before

the hearing was adjourned. Whether petitioner's questions

pursuant to the subpoenas will address the same subjects already

covered by previous witnesses cannot be determined until the

of opposing counsel, and addresses policy concerns not present

here (see e.g. Shelton v American Motors Corp., 805 F2d 1323,

1327 [8th Cir 1986]; Dufresne-Simmons v Wingate, Russotti &

Shapiro, LLP, 53 Misc 3d 598, 606-607 [Sup Ct, Bronx County

2016]; Q.C. v L.C., 47 Misc 3d 600, 602-603 [Sup Ct, Westchester

County 2015]; Stevens v Cahill, 50 Misc 3d 918, 922 [Sur Ct, NY

County 2015]). Notably, Flug has never acted directly as counsel

for SLA in this proceeding; instead, Frering and Marisco appear

as counsel, and petitioner has not sought to compel their

testimony. Despite her title, Flug is apparently named as one of

several senior officials potentially possessing non-privileged

information pertaining to SLA's general policies and standards. 
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questions are posed. Likewise, respondents' claim that subpoenas

against senior officials may potentially become burdensome and

interfere with enforcement operations if large numbers of other

licensees begin to employ them in disciplinary proceedings is

both speculative and irrelevant to determining whether a proper

basis exists for quashing these subpoenas. 

Finally, respondents claim that the true purpose of

petitioner's subpoenas is to demonstrate that SLA has engaged in

selective or discriminatory enforcement, and that such a defense

is not ordinarily developed as a direct defense in an

administrative proceeding, but should be separately submitted to

a judicial tribunal following the conclusion of the

administrative process (see Matter of 303 W. 42nd St. Corp. v

Klein, 46 NY2d 686, 693 n 5 [1979]; Matter of Bell v New York

State Liq. Auth., 48 AD2d 83, 84 [1975]). This claim is also

premature and would more properly be raised in response to

specific questions at the administrative hearing. Petitioner was

authorized to issue the challenged subpoenas; respondents did not

meet their burden to demonstrate that the subpoenas are obviously

futile or that the information sought is completely irrelevant

and immaterial. Accordingly, Supreme Court properly denied the

cross motion to quash the subpoenas (see Matter of Edge Ho

Holding Corp., 256 NY at 381; Matter of Hogan v Cuomo, 67 AD3d at

1145; Matter of New York Temporary State Commn. on Lobbying v

Crane, 49 AD3d at 1068).

Peters, P.J., Devine, Clark and Aarons, JJ., concur.

ORDERED that the order is affirmed, with costs.

ENTER:

Robert D. Mayberger

Clerk of the Court