Source: https://findingtheuncommondeal.com/demonstrating-the-irrational-whatever-happened-to-article-78-new-york-law-journal/
Timestamp: 2019-04-20 04:24:46+00:00

Document:
CPLR Article 78 gathers together the old writs used by the common law courts to review the work of administrative agencies. Section 7803 of that article limits the questions that can be raised in such proceedings to whether the agency failed to perform its duty, acted in excess of jurisdiction, violated lawful procedure, was affected by an error of law, was arbitrary and capricious, abused discretion, or acted in the absence of substantial evidence. Of these, the question that has come to dominate all the others is whether the agency was arbitrary and capricious.
While I agree with the majority’s statement of law that “[t]he administrative agency charged with enforcing a statutory mandate has broad discretion in evaluating pertinent factual data and inferences to be drawn therefrom, and its interpretation will be upheld so long as not irrational and unreasonable,” I respectfully disagree that this record meets even that modest standard. Instead, I believe that a reviewing court must be presented with a record containing factually meaningful findings so as to enable appellate judges to draw those rational inferences to support, and thus affirm, a result that affects parties’ legitimate and significant rights. Otherwise, this Court’s mandate—intended to be a conscientious review power over governmental action—will be transformed into a superficial habit of “rubber stamping” the most vacuous statements paraded before us as findings of fact.
The key phrase in the 333 East 49th Assocs. dissent is “conscientious review power over governmental action.” Intriguingly, Justice Marlow cites to nothing to back up his assertion that Article 78 should be “conscientious” and there is much in the literature to suggest to the contrary.
Where a court will overturn an agency will at times turn on interpretation of other CPLR §7803 grounds: failure to perform a duty, acting in excess of jurisdiction, abusing discretion, or acting without substantial evidence. The basis of the controversy may be that one side finds that one of these other grounds exists, but the other sees it really as the “arbitrary and capricious” standard. Thus in I.G. Second Generation Partners L.P. v. DHCR, majority saw a lack of jurisdiction for a result and the dissent saw that exercise of jurisdiction as having been rational. Although this is a view expressed in a dissent, it is nonetheless striking that an appellate justice could think that an agency can “rationally” arrogate to itself a power denied to it by statute. Yet, such has become the power of judicial reticence to employ Article 78 to overturn agencies, that such views could gain currency.
In examining the judicial literature in this field, one is perhaps most shocked by passages such as that found in Verbalis v. DHCR,9 in which the First Department found that the Supreme Court had “exceeded its authority in determining that DHCR’s decision on remand was inequitable.” As the basis for this statement the court gives the well familiar adage, “If the agency’s decision is rational, it must be upheld, even though the court, if viewing the case in the first instance, might have reached a different conclusion.” We must underline what is happening here: The second highest court in the state of New York is saying that fundamental fairness and equity are irrelevant in Article 78 proceedings. So long as there is some non-insane way of seeing the agency’s decision as obeying the law, it does not matter how badly a litigant is unfairly or inequitably hurt by that application of the law.
With these limitations in place, the truly ethical practitioner needs a set of tools by which to measure a case and advise a client before undertaking representing that client in an Article 78 proceeding. And no matter how well those tools are applied, this same practitioner must advise the client that from a purely statistical analysis of the Article 78 decisions that have come down, only those cases that make their way all the way to the Court of Appeals stand an even chance of success.
The first tool is analysis of the facts.
Absent an explanation by the agency, an administrative agency decision which, on essentially the same facts as underlaid a prior agency determination, reaches a conclusion contrary to the prior determination is arbitrary.
The key phrase in this holding is “absent an explanation by the agency.” Matter of Field discusses at some length how the agency is free to use the same kinds of stare decisis principles as a court to argue that its prior holding is no longer valid for whatever reason. It is where the agency fails to cite or argue away from its previous contrary holding that it is acting arbitrarily as a matter of law.
However, since there is such scarcity of reporting of decisions from the agencies, one is going to have to step outside of normal research patterns. For this purpose, the major electronic publishers may be essentially useless except insofar as they may report judicial decisions that reference agency decisions. A vastly superior tool for finding these decisions is the Housing Court Reporter,13 a reporter that makes finding the decisions very easy. However, judicial decisions themselves are of no use to build the case against the agency decision, unless, judicial decision in hand, one FOILs a copy of the underlying agency decision.
If one makes a habit of sending in copies of administrative decisions to CHIP (Community Housing Improvement Program) or the RSA (Rent Stabilization Association) one can ask what they have in their archives of similar subject matter.
Finally, one can search one’s own files for other decisions from the agency and one can even get assistance from other firms who have had their own encounters with the agencies. Here collegiality with one’s competitors and even adversaries can wind up working extraordinarily effectively for one’s clients. Indeed, this is not the time to be shy about asking one’s own client for help. The client may have the prior contrary agency decision and may not have mentioned it during the intake interview.
Finally, one should read every single bit that the agency in question has ever written on the subject matter of the proposed Article 78 proceeding—every bulletin, every newsletter, every handout, every flyer. If the agency in question has written anything contrary to its holding in the case one seeks to challenge in the courts, one has a substantial basis to bring the proceeding.
There are almost no judicial proceedings that are easy to bring, but Article 78 proceedings are among the toughest possible to win. The statute which sets the standard of review on its face appears to set the bar very high, but when one looks at how the courts actually process these cases, especially in the downstate appellate divisions, the bar is higher still. In most cases, the best advice to give to a client is simply not to bother unless the client is prepared to go to the Court of Appeals where chances of success are no better than even. There are some winnable Article 78 proceedings, but the standardized methods of researching a case will rarely be adequate to the client’s goal. Achieving the extraordinary outcome of an actual victory will generally require both extraordinary facts and extraordinary technique.
1. The full study listing the cases analyzed and the results obtained may be viewed at www.alblawfirm.com/rubberstamp.pdf. 2. 40 AD3d 516 (1st Dept. 2007). 3. See Matter of Nehorayoff v. Mills, 95 NY 2d 671 ; Matter of County of Monroe v. Kaladjian, 83 NY 2d 185 ; Matter of Pell v. Board of Educ., 34 NY 2d 222, ). 4. 99 NY2d 144 (2002). 5. 34 AD3d 379 (1st Dept. 2006).

References: §7803
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