Source: https://governmentreform.wordpress.com/2015/03/20/the-case-law-under-the-moreland-act/
Timestamp: 2017-12-12 00:53:01
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The Case Law under the Moreland Act | Government Reform
The Case Law under the Moreland Act
Given the last two years of issues involving Moreland Act commissions in New York State, I thought it advisable to review the case law that has developed under the Moreland Act. It needs to be emphasized that this case law is basically aimed at investigations of State agencies and not the State legislature. The Moreland Act dates from 1907 and was clearly designed for and by Governor Charles Evans Hughes who took office after winning election in 1906. Hughes had made his mark in New York State government as the lead investigator of the committees investigating the gas industry and the life insurance industry, and it was widely assumed he would try to increase the power of the governor to pursue further investigations without seeking approval of the legislature. The act received its popular name from Sherman Moreland who was the sponsor of the legislation in the State Assembly.
Section six of the Executive Law, authorizes the governor “at any time, either in person or by one or more persons appointed by him for the purpose, to examine and investigate the management and affairs of any department, board, bureau or commission of the state.” The statute further empowers the governor and the persons appointed to a commission “to subpoena and enforce the attendance of witnesses, to administer oaths and examine witnesses under oath and to require the production of any books or papers deemed relevant or material.” This language was in the original Moreland Act 1907. L. 1907, Ch. 539. While a Moreland Act commission may only examine state departments, boards, bureaus or commissions, (and not the State legislature) when it examines such agencies, it has exceptionally strong powers. The decided cases involving the powers of a Moreland Act commission, appointed, are nearly unanimous in providing that such commissions have broad authority. The decisions, with one early exception, all support the subpoena powers given to a Moreland Act commission.
While the Moreland Act was in regular use from the time it was first enacted, there have been only been a limited number of cases that refer directly to the Act.[1] In the first fifty years that the Act was in effect, and when it was most frequently utilized by governors, there were relatively few cases that specifically involved the reach and effect of the Act.[2] Moreland Act commissions have rarely been resorted to in the years since the Rockefeller administration, but in two instances, (nursing homes in the 1970’s and government corruption in the 1980’s) considerable litigation arose from these investigations.
The first time that the Act was mentioned was in People v. Anhut, 162 A.D. 517, 519 (1st Dept., 1914), which involved a prosecution that came about after the governor had established a Moreland Act commission to review State hospitals for the mentally ill. The court stated in regard to the Moreland Act, “The power of the Governor to appoint a committee and the authority of the latter to issue subpoenas and compel the attendance of witnesses is not denied.”
The Moreland Act was also a point of contention in the odd case of People v. Hebberd, 96 Misc. 617 (Sup. Ct. NY County, 1916) which is basically the one case questioning the authority of a Moreland Act commission. In 1915, Governor Whitman appointed a Moreland Act commissioner to examine and investigate the state board of charities. As a consequence of the investigation, criminal charges were brought against a number of individuals for criminal libel, for a conspiracy to avoid service of a subpoena, and a perjury prosecution against defendant Hebberd. The defendants had issued pamphlets concerning the charities that were the subject of the alleged criminal libel. The Moreland Act Commission determined to investigate the issuance of the pamphlets. It was alleged that the defendants conspired to avoid the service of a subpoena issued by the Commission and that defendant Hebberd committed perjury when he testified about the issuance of the pamphlets. The court found no basis for the criminal libel and further found that the Commission’s authority was simply to investigate charities, not to investigate the pamphlets. When the Commission determined to investigate the pamphlets and the authorship of the pamphlets, the court concluded, it was operating outside its authority as a Moreland Act Commission. The court stated, “But when the commissioner sought to inquire into acts of private individuals deemed hostile to the investigation conducted by him, for the purpose of ascertaining whether they were responsible for alleged libelous publications, which were calculated to belittle or injuriously affect the work of the commission, a serious question arises whether such an inquiry transcended his powers as commissioner, which were purely statutory and strictly confined to the provisions of the statute.” Id. at 631-632. The court found that the issues involving the authorship of the pamphlets were not proper subjects for this Moreland Act commission. Accordingly, there was no jurisdiction to issue a subpoena on this subject and the alleged perjurious testimony “was not material to the investigation which the commissioner was empowered to make, and therefore, under the Penal Law, the crime of perjury could not be established.” Id. at 650.
After the Hebberd case, no cases involving Moreland Act commissions were decided until after the creation of the Moreland Act Commission investigating workers’ compensation and potential kickbacks in the medical industry in the early 1940’s In Schiffman v. Bleakley, 46 N.Y.S.2d 353 (Sup. Ct., N.Y. County 1943), a doctor who had been subpoenaed by the Commission refused to testify stating that the commission had no power over him and that his constitutional rights were being denied. The court quickly dispensed with these arguments stating, “These contentions manifest an egotistical misunderstanding by petitioner as to the purpose of this Commission. It is a fact finding body. Its duties general, dealing with the practices of the Labor Department, the administration of the law and the effect on the Public. Its dealings with the petitioner are not personal but only incidenta to its fact finding. His importance as a witness is manifest in view of his extensive practice. He knows much of present methods. This is his opportunity to impart that knowledge to the Governor’s representatives.” Id. at 354. The court added, “The Commissioners have an unquestionable right to issue subpoenas.” Id . In the case of Bleakley v. Schlesinger, 294 N.Y. 312 (1945), the Commission subpoenaed the books of an X-ray lab firm. The firm’s corporate secretary-treasurer refused to provide the records. The Court of Appeals held that the refusal to provide the subpoenaed records could provide the basis for a criminal contempt citation. The court found that “production of the books is a reasonable corporate requirement and the … officer, must either produce the wanted corporate books or give a reasonable explanation of his inability to do so, with the alternative of commitment. Id.at 317.
Harness Racing Investigation
A decade later in reviewing subpoenas issues by the Moreland Act Commission reviewing harness racing in the 1970’s, the courts similarly affirmed the powers of a Moreland Act Commission . In Alexander v. New York State Com., 306 N.Y. 421 (1954), the Court of Appeals had to decide on the validity of subpoenas issued to apart-owner of a harness track, The owner had contended that they were too sweeping and were not relevant to the investigation of harness racing. The court upheld the subpoenas finding no issue as to their breadth, stating, “The commission will, of course, be restricted to such material as is relevant to the subject of the inquiry, but is not obliged to take petitioners’ word for what is or is not relevant.”
A similar challenge to a subpoena issued by the Moreland Act commission on harness racing was rejected in Weil v. New York State Com. to Investigate Harness Racing, 205 Misc. 614 (N.Y. Sup. Ct. 1954). In Weil, a series of individuals challenged the subpoenas issued by the Moreland Act Commission claiming that the commission lacked the power to issue the subpoenas, that the subpoenas were indefinite, and that the issuance of the subpoenas violated their constitutional rights. The court dismissed these arguments finding that the Commission had the clear “unquestionable right” to issue subpoenas and that there were no constitutional violations presented by the subpoena.
The petitioners argued that subpoenaing records of their involvement in racing outside New York State was beyond the power of the Commission. The court rejected this argument as well, finding that, despite the “petitioners are enjoying privileges granted under licenses issued by this State, and their personal connection with harness racing and tracks outside is a legitimate subject of inquiry under the broad powers granted to the Governor by the Moreland Act to deal with matters affecting the public interest.” Id. at 619.
While the nursing home investigations in the mid 1970’s did not bring any specific challenges to Moreland Act authority, litigation was brought involving the powers of a nursing home special prosecutor appointed under Section 63.8 of the Executive Law. Soon upon entering office, Governor Carey appointed both a Moreland Act Commission to investigate nursing homes, and, with Attorney General Lefkowitz, a special prosecutor under Section 63.8 of the Executive Law to “inquire into possible criminal violations in the nursing home industry and related matters.” Executive Order 3.4.[3] By contrast, in 1987, Governor Mario Cuomo, issued a single executive order, (Executive Orders 4.88 amended by 4.88.1) establishing both a Moreland Act commission and through the attorney general’s office under Section 63.8 of the Executive Law an inquiry into “public peace, public safety and public justice.”
Section 63.8 had long been interpreted as authorizing only a broad inquiry into “public peace, public safety and public justice,” and had never been interpreted to not authorize the Attorney-General to investigate a specific crime for the purpose of ascertaining whether a particular individual committed that crime. See Ward Baking Co. v. Western Union Tel. Co., 205 A.D. 723 (3rd Dept., 1923). The general authority of the governor with the attorney general to authorize a broad inquiry into public safety inquiry concerns was affirmed in In Matter of Di Brizzi (Proskauer), 303 NY 206, (1951), The Court of Appeals held that Section 63.8 could be used for investigating organized crime and that the legislature could confer authority upon an executive department to exercise subpoena power in connection with an investigation in aid of the executive function.[4] Similarly, in Greenspon v. Stichman, 12 N.Y.2d 1079 (1963), the Court of Appeals, without issuing an opinion, rejected the claim that combining the Moreland Act powers with Section 63.8 powers “violated the doctrine of separation of powers and the system of checks and balances provided for in the Constitution.” Id.
With the nursing home investigations, the operators of nursing homes argued that subpoenas issued by the special prosecutor appointed under Section 63.8 were invalid since they sought records from family run businesses and thus were similar to the inquiry rejected in Ward Baking . The Court of Appeals in Sigety v. Hynes, 38 N.Y.2d 260 (1975) found that since family run nursing homes were defined as hospitals under the Public Health Law and thus subject to State regulation, the Special Prosecutor under Section 63.8 was within his rights in issuing a subpoena for the records of the nursing homes. The court recognized “that there exists a reasonable relationship between the action taken by the Governor, through the , and the proper discharge of the executive function.” Id. at 266. Since the records of a nursing home were “not by … nature a family business” the Special Prosecutor was authorized to subpoena its records. The Special Prosecutor, however, was not initially authorized to retain the subpoenaed records of nursing homes. The court found, further, that this was not within the Special Prosecutor’s powers under §63.8 as determined by Windsor Park Nursing Home v. Hynes, 42 N.Y.2d 243, 247 (1977). After this decision, the legislature amended the law to provide for a right of retention. L 1977, Ch. 451.
After Governor Carey issued and Attorney General Lefkowitz authorized a similar §63.8 special prosecutor in 1976 directed at private proprietary homes for adults (See Executive Order 3.36), the special prosecutor’s issuance of subpoenas was challenged. In Friedman v. Hi-Li Manor Home for Adults, 42 N.Y.2d 408 (1977), the Court of Appeals ruled that, given the close similarity between proprietary homes and nursing homes, the §63.8 special prosecutor had the right to issue subpoenas to proprietary homes and the landlords of such homes. The court found that there was little difference between a nursing home special prosecutor and a proprietary home special prosecutor. “Similarities between these two areas of activity are evident. To a large extent the consumers of care and service come from the same sector of our State’s population. Historically the great bulk of financial support has and does come from the public treasury, formerly in direct grants to the homes, now in indirect but equally significant subsidy routed through the residents of the homes.” Id. at 414.
In Hi-Li Manor, however, the court refused to grant the Governor and the Attorney General carte blanche on §63.8 investigations. The court wrote that its decision “should not be understood as viewing subdivision 8 of section 63 as any reservoir of latent authority for investigations, however desirable they may be thought to be, into other areas of legitimate governmental concern or responsibility. Quite the contrary. In perspective we perceive recourse to this section as having been intended only when for compelling reasons reliance cannot or should not necessarily be placed on specific, individualized grants of authority from the Legislature.” Id. at 415. ( Id. at 417. Judge Cooke added, “Parenthetically, the suggested ad hoc approach would be impractical and self-defeating (e.g., when the Legislature is in recess, when powerful interests are involved, or when a politically sensitive investigation should be launched and there is a politically divided Legislature). An investigation, to be successful, must proceed promptly under an ever-present authority to conduct one.” Id. at 420.
Despite the limitations in the Court of Appeals’ language on §63.8 authority, subpoenas issued pursuant to the §63.8 have been upheld in a series of cases including Hynes v. Moskowitz, 44 N.Y.2d 383 (1978); and Doe v. Kuriansky, 59 N.Y.2d 836 (N.Y. 1983). See also Roseman v. Hymes, 1977 U.S. Dist. LEXIS 13024 (S.D.N.Y. Sept. 1, 1977).
Feerick Commission
There was no litigation under the Moreland Act until the State Commission on Government Integrity [Feerick Commission] was established in the late 1980’s. As stated previously, the Feerick Commission received its grant of powers both under the Moreland Act and under §63.8 of the Executive Law. All the attempts through the courts to restrict the powers of the Feerick Commission proved ultimately unsuccessful.
Some of the lawsuits brought against the Feerick Commission could be viewed as ancillary efforts to prevent the Feerick Commission from operating effectively. Rather than frontal attacks questioning the authority of the Feerick Commission, these suits were designed to make it more difficult for the Feerick Commission to function.
An attempt to require the Feerick Commission to adhere to the provisions in Section 73 of the Civil Rights Law requiring that two members of the Commission be present whenever testimony was taken from a witness was rejected in Riker v. New York State Com. on Government Integrity, 153 A.D.2d 158 (3d Dep’t 1990). The court found that this requirement only applied to legislatively created temporary state commissions. It did not apply to a Moreland Act commission established by the governor.
Similarly, an attempt to prevent the State Board of Elections from providing records containing personal information to the Feerick Commission as a violation of the Personal Privacy Protection Law was denied in Building a Better New York Committee v. New York State Com. on Government Integrity, 138 Misc. 2d 829, (Sup. Ct. Albany Co.,1988). The court found that the Personal Privacy Protection Law authorized disclosure of personal information to “another agency if the record sought to be disclosed is necessary for the receiving agency to comply with the mandate of an executive order.” Id. at 834. In a follow-up to this decision, the plaintiff, having failed in his effort to block the transfer of the records from the Board of Elections, tried to utilize the Personal Privacy Protection Law to prevent the Feerick Commission from publicly disclosing the record. The Third Department found that the action was barred both by res judicata and that the data sought to be withheld from public disclosure did “not contain the type of records which the statute is intended to protect.” The Personal Privacy Protection Law has no bearing on the issue of public access to the subject data because the file does not contain the type of records which the statute is intended to protect. Spargo v. New York State Com. on Government Integrity, 140 A.D.2d 26, 30 (N.Y. App. Div. 3d Dep’t 1988); app. denied 72 N.Y.2d 809 (1988).[5]
In Albany Industrial Dev. Agency v. New York State Com. on Government Integrity, 144 Misc. 2d 342 (Sup. Ct., Albany County, 1989) the plaintiffs who were municipal agencies and officers sued to quash a subpoena duces tecum issued by the Feerick Commission arguing that the investigation of the Commission was near completion. Therefore, a higher burden was placed on the Commission to justify its subpoenas. The court rejected this argument finding that “each of the challenged requests documents and records which are relevant and material to the Commission’s inquiry.” Id. at 344.
The more substantive challenges to the Feerick’s Commission’s powers came in the cases of New York State Com. on Government Integrity v. Congel, 156 A.D.2d 274 ( 1st Dep’t 1989) app, dismissed, 75 N.Y.2d 836 (1990) and New York Republican State Committee v. New York State Com. on Government Integrity, 138 Misc. 2d 790 (Sup. Ct., NY. County 1988) aff’d without opinion, 140 A.D.2d 1014 (1st Dep’t., 1988).
In the Congel case, the Pyramid Companies, a real estate development group, was under investigation for its involvement in an election in the town of Poughkeepsie. The Feerick Commission issued subpoenas duces tecum for records of Pyramid, and the trial court refused to enforce the subpoenas. The trial court found that the Commission’s investigation had already been progressed to the point where the Commission had issued a preliminary report, and that the subpoenas were, accordingly, “for the purpose of ferreting out specific violations of law, a prosecutorial function not within the Commission’s purview.” 156 A.D. 2d at 277.The Appellate Division disagreed with the trial court. It found that the subpoenaed materials were relevant to the Commission’s inquiry. Id. at 278 and that “provided the materials are relevant to the proper purpose of the investigation, the subpoena’s demand for their disclosure must ordinarily be honored unless there is some sustainable claim of harassment or overbreadth.” Id. As a result, there was nothing “to prevent the Commission from obtaining material with incidental prosecutorial application, so long as the material is also relevant to the Commission’s proper objectives. Id. at 279. Based on the relevance of the subpoenaed materials, the subpoenas issued by the Feerick Commission were to be enforced.
A similar result obtained in the Republican State Committee case. The Republican State Committee was resisting subpoenas issued to obtain information on its housekeeping account. The argument was that “the Commission has overstepped its legal authority under the executive order and the Executive Law by issuing subpoenas to entities which are not either a ‘department, board, bureau or commission of the state’, and that the Commission’s investigatory power, and hence its subpoena power, is limited to State entities as described in Executive Law § 6.” 138 Misc. 2d 790 at 793. The Committee also claimed that the subpoenas could chill contributions to the party thereby violating the First Amendment.” Id. at 794.
The court disagreed. Citing the Schiffman case, supra, it found that the Committee was not the focus of the Commission’s fact finding but was incidental to its fact-finding purposes dealing with the Board of Elections and its enforcement of the campaign finance disclosure laws. The court found that the Feerick Commission, as a Moreland Act Commission and as supplemented by its powers under §63.8 of the Executive Law, had authority to issue the subpoenas. Id. at 795. Further, “the Commission has established its authority, and the relevance of the committees’ until now undisclosed financial records to a complete evaluation of the present campaign disclosure laws.” Id. at 796. The disclosure of the housekeeping accounts also had no chilling effect on First Amendment rights. Thus, the power of the Feerick Commission to issue subpoenas to non-government entities was clearly upheld.
Again, with the exception of the Hebberd case, judicial decisions have validated the powers of Moreland Act Commissions. The treatment of the Moreland Act Commissions by the courts validates the description of the law made by the New York Tribune that the original legislation was signed by Governor Hughes. “This bill confers on the Governor almost unlimited powers along this line, powers that no Governor of the state has ever had before…Friends of the administration maintain that this bill is one of the most important of the year and that it will be an important factor in the clean government and welfare of the state.”[6] While the Moreland Act gives the governor no authority over the legislature, it possesses broad powers over those government entities that are subject to its jurisdiction.
[1] There are some opinions of the Attorney General that have mentioned generally the powers of a Moreland Act Commission. See 1939, Op.Atty.Gen. 125; 1927, Op.Atty.Gen. 301; 1909 Op.Atty.Gen. 276.
[2] While the courts may have rarely adjudicated the powers of a Moreland Act commission, in the case of In re Second Report of November, 1968 Grand Jury of Erie County, 26 N.Y.2d 200, 215 (1970) the Court of Appeals declared, “And, of course, the Governor’s power to direct so-called Moreland Act investigations, always resulting in reports, has now become classic.”
[3] This was somewhat similar to the approach taken by Governor Rockefeller regard to investigating corruption or misconduct and government. He first appointed a special prosecutor pursuant to Section 63.8 of the Executive Law. See Executive Order 1.10. (September 8, 1962). Four months later, Governor Rockefeller issued Executive Order 1.11 which added the Moreland Act powers to the powers held by the special prosecutor under Section 63.8
[4] In a one sentence concurring opinion, Judge Fuld wrote, “Study of the Executive Order makes clear that the Governor acted under both section 8 and subdivision 8 of section 62 of the Executive Law and, that being so, there can be no doubt either as to the authority of the Governor to appoint the so-called Crime Commission or as to the power of that commission to issue the subpoena here in question.” 303 N.Y. at 218. Judge Fuld’s views suggest that the Moreland Act commission may provide an entity with more powers than an entity created solely under §63.8.
[5] Plaintiff Spargo also was involved with the Feerick Commission on the issue of proper venue on the issuance of compelling compliance with subpoenas. See Spargo v. New York State Com. on Government Integrity, 144 A.D.2d 897 (3d Dep’t 1988), app. dismissed 73 N.Y.2d 871 (1989). The venue issue also arose in the case of
New York Republican State Committee v. New York State Com. on Government Integrity, 138 A.D.2d 884 (3d Dep’t 1988), app. denied 72 N.Y.2d 803 (1988).
[6] “Moreland Bill Signed,” New York Tribune, June 22, 1907 Pp. 1-2. See also “Legislature’s Work,” New York Tribune, June 27, 1907 Pg. 2 “One of the important measures of the year was the Moreland Bill empowering the Governor personally or by appointees to investigate every department or bureau or division of the state to ascertain the exact state of its business.”
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