Matter of Blue v New York State Dept. of Fin. Servs.

2024 NY Slip Op 31224(U)

April 10, 2024

Supreme Court, New York County

Docket Number: Index No. 150526/2023

Judge: Denise M. Dominguez

Cases posted with a "30000" identifier, i.e., 2013 NY Slip

Op 30001(U), are republished from various New York

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This opinion is uncorrected and not selected for official

publication.
NYSCEF DOC. NO. 30 

INDEX NO. 150526/2023 

RECEIVED NYSCEF: 04/10/2024 

PRESENT: 

SUPREME COURT OF THE STATE OF NEW YORK 

NEW YORK COUNTY 

HON. DENISE M DOMINGUEZ PART 

Ju.Itice 

35M 

---------------------------------------------------------------------------------X INDEX NO. l 50526/2023 

IN THE MATTER OF THE APPLICATION OF REVEREND 

MARK BLUE, INDIVIDUALLY, AND AS PRESIIJENT OF 

TIIE BUFFALO HRANCII OF THE NATIONAL 

ASSOCIATJON FOR THE ADVANCEMENT OF COLORED 

PEOPLE (NAACP), 

Petitioner, 

- V -

NEW YORK STATE DEPARTMENT OF FINANCIAL 

SERVICES, ADRIENNE A. HARRIS, SUPERINTENDENT, 

Respondents 

MOTION SEQ. NO. __ __;_00.:....:l=----~ 

DECISION + ORDER ON 

MOTION 

------------------------ ---- ---------------------------------- --------------------X 

The following e-filed documents, listed by NYSCEF document number (Motion 00 I) 9, 13, 18, l 9, 20, 21, 22, 23, 

24,25, 26,27,28, 29 

were read on this motion to/for JUDGMENT - DECLARATORY 

For the reasons that follow, the Petition pursuant to CPLR Article 78, challenging 

Respondents, NEV/ YORK STATE DEPARTMENT OF FINANCIAL SERVICES (DFS) and 

ADRIENNE A. HARRIS, SUPERINTENDENT's denial of the Petitioner's Freedom of 

Information Law ("FOIL") request is hereby denied and this proceeding is dismissed and the crossmotion by Respondents to dismiss the Petition is denied as moot. 

The within Petition, seeks to compel Respondents to provide all documents and records 

submitted to DFS (in accordance with Insurance Law § 1506) related to the June 2020 application 

by Highmark Health and Highmark Inc. (Highmark) for authorization to affiliate with HealthNow 

New York, Inc., as requested in Petitioner's November 22, 2021 FOIL request. 

Respondents' cross-motion seeks ihe dismissal of the Petition pursuant to CPLR §7804(1) 

and §321 l(a)(2), for failure to state a claim, as Insurance Law §1504(e) is as a statutory exemption 

150526/2023 IIM/0 OF THE APPLICATION OF REVEREND MARK BLUE, ET AL. vs. NEW YORK 

STATE DEPARTMENT OF FINANCIAL SERVICES, ET AL. 

Motion No. 001 

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Page 1 of 7 

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NYSCEF DOC. NO. 30 

INDEX NO. 150526/2023 

RECEIVED NYSCEF: 04/10/2024 

to FOIL disclosure of materials that the Petitioner requested and due to trade secret and personal 

privacy exemptions. 

Background 

Approximately in June of 2020, HealthNow New York, a New York not-for-profit 

insurance company, sought DFS's approval to affiliate with Highmark Inc., a Pennsylvania notfor-profit insurance company, triggering Insurance Law §1506. In connection with the application 

for approval, various materials and information were submitted to DFS in accordance with 

Insurance Law §1506. 

Petitioner served a FOIL request on Respondents dated November 22, 2021. Therein 

Petitioner sought "all documents and records submitted to and reviewed by the Department in 

connection with its approval and ongoing examination of the so called 'Affiliation' between 

HealthNow New York and Highmark Health." Although the FOIL request identified some of the 

specific information requested, the request was specifically not limited to the identified items. Yet, 

the FOIL request is exceedingly broad in nature as it seeks without limitation, any and all records 

and documents connected to the affiliation application between HealthNow NY and Highmark. 

Following the submission of the FOIL request, Intervenor-Respondents Highmark Western 

and Northeastern New York Inc., Highmark Inc., and Highmark Health (Highmark) submitted a 

letter of necessity to DFS, dated July 5, 2022, requesting exemption of all information requested 

from Petitioner's FOIL request pursuant to Public Officers Law §87(2), other than that information 

that was previously made public. Therein, 1 lighmark advised DFS that the requested materials 

were proprietary in nature and could be used in a manner that would cause substantial competitive 

injury to I lighmark. 

DfS then issued a denial of Petitioner's fOIL request, by letter dated .July 11, 2022. 

150526/2023 IIM/0 OF THE APPLICATION OF REVEREND MARK BLUE, ET AL. vs. NEW YORK 

STATE DEPARTMENT OF FINANCIAL SERVICES, ET AL. 

Motion No, 001 

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NYSCEF DOC. NO. 30 

INDEX NO. 150526/2023 

RECEIVED NYSCEF: 04/10/2024 

Therein, DFS specifically noted that the requested information was exempt from FOIL disclosure 

pursuant to Public Officers Law §87(2) and pursuant to Insurance Law§ 1504(a). 

Petitioner then appealed the denial, and by letter dated September 22, 2022, DFS denied 

the appeal. Therein, DFS again relies upon Public Officers Law §87(2)(d) and Public Officers Law 

§87(2)(a) and Insurance Law §1504(a) as exemptions for the basis to deny the FOIL request. DFS 

notes that in making its determination, it requested a statement of necessity from Highmark and 

relied upon such statement in forming its conclusion. Specifically, DFS concluded that the 

biographical affidavits were exempt per the personal privacy exemption as such records contained 

employment history, addresses, phone numbers, and other personal and private infonnation. DFS 

also concluded that the requested records were exempt as trade secret/competitive injury as the 

public disclosure of financial status and business operations ofHighmark would provide any of its 

competitors and unfair advantage, as they could rely upon Highmark's strategics and plans in order 

to formulate their business structure. In essence, the competitors would be able to capitalize upon 

Highmark's resources and development without expending their own resources. 

Petition 

It has long been held that judicial review pursuant to CPLR §7803 is limited to whether 

there was a rational basis for the administrative agency's detennination, whether the determination 

was arbitrary and capricious or whether there was an abuse of discretion. (See Pell v. Bd. of Ea. of 

Union Free Sch. Dist. No. 1 of Towns ofScarsdale & Mamaroneck, Westchester Cnty., 34 N. Y.2d 

222 [1974]; Gilman v ;v_ Y. State Div. of Ilous. & Community Renewal, 99 N.Y.2d 144 f2002l). 

However, "[ w]hen reviewing the denial of a FOIL request, a court must apply a far different rule. 

It is to presume that all records of a public agency arc open to public inspection and copying, and 

must require the agency to bear the burden of showing that the records fall squarely within an 

15052612023 I/MIO OF THE APPLICATION OF REVEREND MARK BLUE, ET Al. vs. NEW YORK 

STATE DEPARTMENT OF FINANCIAL SERVICES, ET Al. 

Motion No. 001 

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NYSCEF DOC. NO. 30 

INDEX NO. 150526/2023 

RECEIVED NYSCEF: 04/10/2024 

exemption to disclosure" (New York Comm. for Occupational Safety & Ilea/th v. Bloomberg, 72 

A.D.3d 15 3, 15 8 I.1st Dept 201 OJ citations omitted). 

Here, Respondents and Intervenor-Respondent Highmark Western And Northeastern New 

York Inc. ("Intervenor-Respondent") assert Petitioner's FOIL request is exempt from disclosure 

pursuant to Public O1Ii.cer's Law §87(2)(a) (by statute via Insurance Law §1504) Public Officer's 

Lmv §87(2)(6) (invasion of personal privacy) and §87(2){d) (trade secrets). This Court agrees. 

Article 15 of the Insurance Law controls applications for affiliation approval. Insurance 

Law § 1506 provides that "[tlhe superintendent shall disapprove such acquisition if he 

determines ... that such action is reasonably necessary to protect the interests of the people of this 

state .... " In making such assessment, the superintendent must evaluate, in part, the financial 

condition of the acquiring person, the source or funds or assets for the acquisition, whether the 

acquisition may lessen competition in any line of commerce in insurance or create a monopoly and 

whether the acquisition may by hazardous or prejudicial to policy holders and shareholders 

(Insurance Law § 1506[b ][l-7]). 

Intervenor-Respondent Highmark submits evidence via an A1Ii.davit by President Michael 

Edbauer ("Edbauer Aff. ") establishing that personal, confidential and/or trade secret information 

\Vas submitted for consideration to DFS, the agency charged with the duty to acquire and consider 

substantial personal, financial and confidential materials and information in evaluating whether to 

approve any such application. Therein, it is alleged that Highmark applied to DFS to affiliate with 

HealthNow New York in accordance with Insurance Law § 1506(b) and with the understanding 

that the information and materials submitted v,iould be kept confidential as per Insurance Law 

§ 1504. Additionally, Highmark deemed the biographical affidavits submitted with the application 

personal and private as such affidavits contained with personal information for some of the officers 

150526/2023 I/MIO OF THE APPLICATION OF REVEREND MARK BLUE, ET AL vs. NEW YORK 

STATE DEPARTMENT OF FINANCIAL SERVICES, ET AL. 

Motion No. 001 

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INDEX NO. 150526/2023 

NYSCEF DOC. NO. 30 RECEIVED NYSCEF: 04/10/2024 

and board members (as required by 11 YCRR §80-1.6 item 2). Addi tional exhibits submitted 

with the application were also confidential as they contained details deemed trade secret and which 

would cause competitive injury if disclosed. Specifically, that the operational plans submitted 

detailed specific advantages Highmark held over its competitors in the competitive health 

insurance marketplace, which were not know to anyone outside of Highmark, and were only shared 

with DFS as required with the application per Insurance Law §1506(6). 

Insurance Law§ l 504(a) provides that 

"le]very controlled insurer shall file with the superintendent such reports or 

material as the superintendent may direct for the purpose of disclosing information 

concerning the operations of persons within the holding company system that may 

materially affect the operations, management or financial condition of the insurer." 

Insurance Law§ 1504(c)(l) provides that 

"[t]he contents of each report and filing made pursuant to this article and any 

information obtained in connection therewith shall be confidential and proprietary and 

shall not be subject to subpoena or discovery or admissible in evidence in any private 

civil action, and the superintendent shall not make the same public without the prior 

written consent of the controlled insurer to which it pertains unless the superintendent, 

after notice and an opportunity to be heard, shall determine that the interests of 

policyholders, shareholders or the public will be served by the publication thereof. In any 

action or proceeding by the superintendent against the person examined or any other 

person within the same holding company system a report of such examination published 

by the superintendent shall be admissible as evidence of the facts stated therein. 

Insurance Law § 1504( c )(2) provides that 

either the superintendent nor any person vvho received a report or fili ng made 

pursuant to this article and any information obtained in connection therewith, through 

examination or otherwise, while acting under the authority of the superintendent or with 

whom such report, filing, or information are shared pursuant to this chapter, shall be 

permitted or required to testify in any private civil action concerning the report, filing, or 

information. 

Here, Petitioner sought "all documents and records submitted to and reviewed by the 

Department in connection with its approval and ongoing examination ... " of the affiliation 

application. Yet the documents and records submitted for the application are protected by 

Insurance Law § 1504 and are not to be disclosed to the public unless upon prior written consent 

150526/2023 IIM/O OF THE APPLICATION OF REVEREND MARK BLUE, ET AL. vs. NEW YORK 

STATE DEPARTMENT OF FINANCIAL SERVICES, ET AL. 

Motion No. 001 

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INDEX NO. 150526/2023 

RECEIVED NYSCEF: 04/10/2024 

of the insurer, or if there is a determination by the superintendent that the disclosure of the 

submissions \Vas necessary in the interests of the policy holders, shareholders or the public. Upon 

review, consent was specifically denied by Highrnark and the superintendent did not initiate a 

hearing and determine that publication was warranted. Accordingly, based upon the exceedingly 

broad FOIL request, asking for all documents and records related to the affiliation application, and 

as all submissions by the insurer arc protected from pub Ii c disc! o sure by Insurance Law § 15 04, 

the denial of Petitioner's FOIL request was appropriate. 

As made clear by the parties' respective submissions and as discussed when this matter 

was conferenced with the Court, there is not substantial precedent concerning this issue. However, 

Insurance Law § 15 04 has been held to apply to insurance providers and has been held to protect 

the confidential filings submitted by such carriers pursuant to Article 15 of the Insurance Law (see 

e.g. McFerrin-Clancy v. Ins. Dep't r~f'State, 25 Misc. 3d 1223(A), 906 N.Y.S.2d 773 [Sup. Ct. 

New York County 2009j; cf Consol. Edison Co. qf,Vew York v. Ins. Dep't of State ofN.Y., 140 

Misc. 2d 969,978,532 N.Y.S.2d 186 [Sup. Ct. New York County 19881). 

Petitioner's argument that Article 15 of the Insurance Law docs not control because there 

was no "affiliation" but a "merger" is unavailing or persuasive as Petitioner does not rely on any 

caselaw or any legal authority. .Equally unavailing is Petitioner's argument that the requested 

materials are not "reports" so they are not protected under Insurance Law § 1504. Again, Petitioner 

does not rely upon any legal authority for this argument. furthcnnorc, the statue specifically states 

that the "content of each report and filing ... and any information obtained in connection therewith 

therewith shall be confidential and proprietary .... '' 

Accordingly, as Respondents and Intervcnor~Respondent have demonstrated that the 

documents and materials submitted as per Insurance Law § 1506 during the affiliation application 

150526/2023 IIM/O 0 F THE APP LICA TIO N OF REVEREND MARK BLUE, ET Al. vs. NEW YORK 

STATE DEPARTMENT OF FINANCIAL SERVICES, ET Al. 

Motion No. 001 

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are exempt from disclosure pursuant to Public Officer's Law §87(2)(a) and Insurance Law § 1504, 

the denial of the FOIL request was appropriate. 

Moreover, pursuant to the Edbauer Aff., (NYSCEF Doc. 27) the Respondents and 

Intervenor-Respondent have demonstrated valid concerns over the public disclosure of "all 

documents and records" as such require the disclosure of personal information, contained in the 

biographical affidavits, which may be exempt from public disclosure per Public Officer's Law 

§87(2)(b). It is also clear that there are valid concerns over trade secret and/or proprietary 

information that would result in a competitive injury to Highrnark, which may be exempt as per 

Public Officer's Law §87(2)(d). However, as this Court has found that the affiliation application is 

exempt as per Public Officer's I.aw §87(2)(a) and Insurance Law §1504, this Court does not 

specifically reach a conclusion as to the applicability of Public Officer's Law §87(2)(6) or (d). 

Accordingly, for the reasons above, this Court finds that DfS's findings were proper and 

that Respondents have met their burden in showing that Petitioner's broad FOIL request is exempt 

from disclosure (New York Comm. fr.,r Occupational Safety & Health, 72 A.D.3d 153). 

Therefore it is hereby 

ORDERED that the Petition is denied and the proceeding is dismissed; and it is further 

ORDERED that Respondent's cross-motion is denied as moot; and it is further 

ORDERED that counsel for Petitioner within 20 days from this entry of this Order shall 

serve a copy of this order with notice of entry upon all parties and upon the Clerk of the Court. 

4/10/2024 

DATE 

CHECK ONE: 

APPLICATION: 

CHECK IF APPROPRIATE: 

CASE OISPOSEO 

GRANTED 0 OENIEO 

SETTLE OROER 

INCLUOES TRANSFER/REASSIGN 

I I 

DOMINGUEZ, J.S.C. 

~ NON-FINAL DISPOSI __ 

GRANTEO IN PART □ OTHER 

SUBMIT OROER 

FIDUCIARY APPOINTMENT □ REFERENCE 

150526/2023 1/MIO OF THE A PPLICA Tl ON OF REVEREND MARK BLUE, ET AL. vs. NEW YORK 

STATE DEPARTMENT OF FINANCIAL SERVICES, ET AL. 

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Motion No. 001 

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