Palero Food Corp. v. Zucker

• Decision Date: 05 August 2020
• Docket Number: 2017–06289,Index No. 515819/15
• Citation: Palero Food Corp. v. Zucker, 186 A.D.3d 493, 129 N.Y.S.3d 104 (N.Y. App. Div. 2020)
• Parties: PALERO FOOD CORP., etc., et al., Appellants, v. Howard A. ZUCKER, etc., et al., Respondents.
• Court: New York Supreme Court — Appellate Division

186 A.D.3d 493

129 N.Y.S.3d 104

PALERO FOOD CORP., etc., et al., Appellants,

v.Howard A. ZUCKER, etc., et al., Respondents.

2017–06289

Index No. 515819/15

Supreme Court, Appellate Division, Second Department, New York.

Argued—February 3, 2020

August 5, 2020

Locks Law Firm PLLC, New York, N.Y. (Andrew W. Bell of counsel), for appellants.

Letitia James, Attorney General, New York, N.Y. (Anisha S. Dasgupta and Caroline A. Olsen of counsel), for respondent Howard A. Zucker.

Kostelanetz & Fink, LLP, New York, N.Y. (Claude M. Millman of counsel), for respondents Montefiore/New Rochelle and Public Health Solutions.

LEONARD B. AUSTIN, J.P., JOSEPH J. MALTESE, HECTOR D. LASALLE, VALERIE BRATHWAITE NELSON, JJ.

DECISION & ORDER

In a putative class action to recover damages for breach of contract and for injunctive and declaratory relief, the plaintiffs appeal from an order of the Supreme Court, Kings County (Carolyn E. Wade, J.), dated May 12, 2017. The order, insofar as appealed from, granted the motion of the defendant Howard A. Zucker, as Commissioner of the New York State Department of Health, pursuant to CPLR 3211(a) to dismiss the amended complaint insofar as asserted against him as time-barred, and granted that branch of the separate motion of the defendants Montefiore/New Rochelle and Public Health Solutions which was pursuant to CPLR 3211(a) to dismiss the first cause of action, alleging breach of contract, asserted against them.

ORDERED that the order is affirmed insofar as appealed from, with one bill of costs to the respondents appearing separately and filing separate briefs.

The Special Supplemental Nutrition Program for Women, Infants, and Children (hereinafter WIC) provides, among other things, supplemental foods to qualified recipients. WIC is federally funded by the United States Department of Agriculture and is administered at the state level by the New York State Department of Health (hereinafter the DOH). WIC participants receive vouchers for fruits and vegetables and WIC checks, which can be redeemed for certain items at participating grocery stores and pharmacies. These stores and pharmacies (hereinafter WIC Vendors) enter into contracts with local Vendor Management Agencies, which are responsible for managing the WIC Vendors in their region.

On March 20, 2015, the DOH issued a Vendor Bulletin in which it announced a change to WIC-check-cashing procedures. The Vendor Bulletin stated that, effective April 4, 2015, the Not–to–Exceed amount (hereinafter the NTE amount), which is the maximum amount that the DOH would reimburse a WIC Vendor for a particular WIC check, would no longer be printed on WIC checks.

The plaintiffs commenced this class action against the defendants on behalf of all WIC Vendors in New York that were participating in WIC on or after April 3, 2015. The plaintiffs challenged the DOH's decision to remove the NTE amount from WIC checks and claimed that, as a result, the plaintiffs have incurred bank fees for returned checks and have received reduced reimbursement for checks submitted in excess of the NTE amount. The plaintiffs sought declaratory and injunctive relief, as well as to recover damages for breach of contract, from the defendant Vendor Management Agencies Montefiore/New Rochelle (hereinafter Montefiore) and Public Health Solutions (hereinafter PHS). The plaintiffs sought to obtain "declaratory, injunctive and equitable relief" from the defendant Howard A. Zucker, as Commissioner of the DOH (hereinafter the DOH Commissioner).

The Supreme Court granted the motion of the DOH Commissioner pursuant to CPLR 3211(a) to dismiss the amended complaint insofar as asserted against him as time-barred. The court also granted, inter alia, that branch of the separate motion of Montefiore and PHS which was pursuant to CPLR 3211(a)(1) and (7) to dismiss the first cause of action, alleging breach of contract, asserted against them. The plaintiffs appeal.

"[W]here a quasi-legislative act by an administrative agency ... is challenged on the ground that it ‘was made in violation of lawful procedure, was affected by an error of law or was arbitrary and capricious or an abuse of discretion’ ( CPLR 7803[3] ), a proceeding in the form prescribed by article 78 can be maintained and, as a corollary matter, the four-month Statute of Limitations that ordinarily governs such proceedings is applicable" ( New York City Health & Hosps. Corp. v. McBarnette, 84 N.Y.2d 194, 204, 616 N.Y.S.2d 1, 639 N.E.2d 740 ; see Matter of Broadway Barbeque Corp. v. New York City Dept. of Health & Mental Hygiene, 160 A.D.3d 719, 720, 71 N.Y.S.3d 380 ). Here, the gravamen of the amended complaint insofar as asserted against the DOH Commissioner is that the DOH's new WIC-check-cashing procedures were implemented in violation of lawful procedure and were affected by an error of law. Accordingly, the four-month statute of limitations set forth in CPLR 217(1) applies to this action (see New York City Health & Hosps. Corp. v. McBarnette, 84 N.Y.2d at 204, 616 N.Y.S.2d 1, 639 N.E.2d 740 ; Matter of Broadway Barbeque Corp. v. New York City Dept. of Health & Mental Hygiene, 160 A.D.3d at 720, 71 N.Y.S.3d 380 ). Therefore, we agree with the Supreme Court's determination granting the DOH Commissioner's motion...