Patrolmen's Benevolent Ass'n of N.Y., Inc. v. N.Y. State Pub. Emp't Relations Bd.

• Citation: 110 N.Y.S.3d 81,175 A.D.3d 1703
• Decision Date: 19 September 2019
• Docket Number: 528860
• Parties: In the Matter of PATROLMEN'S BENEVOLENT ASSOCIATION of the City of New York, Inc., Appellant–Respondent, v. NEW YORK STATE PUBLIC EMPLOYMENT RELATIONS BOARD, Respondent—Appellant, and City of New York, Respondent.
• Court: New York Supreme Court Appellate Division

175 A.D.3d 1703
110 N.Y.S.3d 81

In the Matter of PATROLMEN'S BENEVOLENT ASSOCIATION of the City of New York, Inc., Appellant–Respondent,
v.
NEW YORK STATE PUBLIC EMPLOYMENT RELATIONS BOARD, Respondent—Appellant,
and
City of New York, Respondent.

528860

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

Calendar Date: August 21, 2019
Decided and Entered: September 19, 2019

110 N.Y.S.3d 83

Golenbock Eiseman Assor Bell & Peskoe LLP, New York City (Jacqueline G. Veit of counsel), for appellant-respondent.

David P. Quinn, Public Employment Relations Board, Albany, for respondent-appellant.

Zachary W. Carter, Corporation Counsel, New York City (Lorenzo Di Silvio of counsel), for respondent.

Before: Garry, P.J., Egan Jr., Clark, Mulvey and Pritzker, JJ.

MEMORANDUM AND ORDER

Garry, P.J.

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Cross appeals from an order and judgment of the Supreme Court (Weinstein, J.), entered March 19, 2019 in Albany County, which, in a combined proceeding pursuant to CPLR articles 75 and 78 and action for declaratory judgment, granted a cross motion by respondent City of New York to dismiss the petition/complaint.

In July 2017, the most recent collective bargaining agreement between petitioner and respondent City of New York expired. Petitioner and the City were unable to negotiate a successor agreement thereafter, and petitioner filed an application for public interest arbitration with respondent Public Employment Relations Board (hereinafter PERB). Pursuant to the Public Employees' Fair Employment Act of 1967 (see Civil Service Law art 14), commonly known as the Taylor Law, PERB referred the matter to a tripartite public arbitration panel, consisting of one member appointed by the City, one member appointed by petitioner, and one member appointed jointly by the City and petitioner (see Civil Service Law § 209[1], [4][c][ii] ). The City selected Robert Linn – who was then the Commissioner of the City's Office of Labor Relations – as its party-arbitrator. Petitioner sent three letters to PERB's Director of Conciliation objecting to Linn's appointment on the grounds of his alleged partiality and his prior representation of petitioner. The Director did not respond. Following petitioner's selection of its party-arbitrator

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and the parties' joint selection of the third panel member, the Director convened the panel and designated Linn as the City's party-arbitrator.

Petitioner commenced this combined proceeding pursuant to CPLR articles 75 and 78 and action for declaratory judgment seeking to disqualify Linn from service. Respondents each filed pre-answer cross motions to dismiss. Following oral argument and additional submissions, Supreme Court granted the City's cross motion and dismissed the petition/complaint. Petitioner appeals, and PERB cross-appeals.

Preliminarily, PERB asserts in its notice of cross appeal that Supreme Court denied its cross motion to dismiss the petition/complaint. However, the petition/complaint was dismissed in its entirety, and we find nothing in the order and judgment indicating that PERB's cross motion was denied or that any cause of action remains against it. As such, PERB is not an aggrieved party, and its cross appeal must be dismissed

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(see CPLR 5511 ; Parochial Bus Sys. v. Board of Educ. of City of N.Y., 60 N.Y.2d 539, 544–545, 470 N.Y.S.2d 564, 458 N.E.2d 1241 [1983] ). Nevertheless, we may consider PERB's arguments as alternate grounds for affirmance of the dismissal of the petition/complaint (see Matter of Seney v. Board of Educ. of the E. Greenbush Cent. Sch. Dist., 103 A.D.3d 1022, 1022 n 1, 962 N.Y.S.2d 397 [2013] ).

The Taylor Law was amended in 1998 to permit police and fire unions in the City and certain other municipalities to have their collective bargaining disputes resolved by PERB (see L 1998, ch 641). Since then, four completed public interest arbitrations have taken place between petitioner and the City – one in 2001 and 2002 (hereinafter the first arbitration), the next in 2004 and 2005 (hereinafter the second arbitration), the third in 2007 and 2008 (hereinafter the third arbitration) and the fourth in 2014 and 2015 (hereinafter the fourth arbitration). In 1999, Linn, an attorney who had previously worked for the City as, among other positions, its Director of Municipal Relations¹ and had then founded his own consulting firm, was retained by petitioner to provide labor relations consulting services. Linn initially provided services to petitioner in connection with litigation (hereinafter the Taylor Law litigation) in which the City and PERB disputed PERB's jurisdiction over collective bargaining disputes between the City and petitioner and the constitutionality of the amended Taylor Law. Petitioner was separately represented by counsel, but asserts that Linn also provided representation by such means as participating in discussions of petitioner's legal strategy, interacting with petitioner's general counsel, providing analyses of the parties' legal pleadings, and participating in moot courts to prepare for oral argument. Petitioner ultimately prevailed in the Taylor Law litigation (see generally Patrolmen's Benevolent Assn. of City of N.Y. v. City of New York, 97 N.Y.2d 378, 740 N.Y.S.2d 659, 767 N.E.2d 116 [2001] ).

Thereafter, Linn continued to provide consulting services to petitioner during the first arbitration and in negotiations leading up to the second arbitration. Petitioner asserts that, during this period, Linn was instrumental in developing its strategic position as to whether the Taylor Law's comparable wages provision (see Civil Service Law § 209[4][c][v][a] )

110 N.Y.S.3d 85

requires comparison with the wages, hours and conditions of employment of other local police employees to the exclusion of those of other nonpolice employees. According to petitioner, this issue

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has continued to be significant in subsequent arbitrations after Linn completed his representation of petitioner in 2003, and will likewise be significant in the current arbitration. Petitioner further asserts that, until his consulting role terminated in 2003, Linn participated in confidential, privileged discussions on the comparable wages issue and was privy to confidential information about the strengths and weaknesses of petitioner's legal positions.

At the commencement of the fourth arbitration in September 2014, the City chose Linn as its party-arbitrator. Petitioner sent a written objection to PERB challenging Linn's appointment on the ground of his prior "attorney relationship" with petitioner. PERB's Director of Conciliation informally advised the parties that he had been advised by PERB's general counsel that PERB did not have jurisdiction to disqualify Linn. PERB then convened the panel with Linn as the City's party-arbitrator. Petitioner asked the panel to disqualify Linn, and the City opposed the request, asserting that petitioner's remedy was a proceeding pursuant to CPLR article 78. Following briefing and a hearing, a majority of the panel – made up of Linn and the jointly-appointed third member – concluded, over the dissent of petitioner's appointed party-arbitrator, that the panel had no jurisdiction to consider petitioner's disqualification request. Petitioner sought no further administrative or judicial review of this determination, participated in the fourth arbitration without renewing its objections, and did not challenge the panel's ultimate arbitration award (see generally CPLR 7511[b][1] ).

Initially, we reject PERB's contention that petitioner was required to exhaust administrative remedies before commencing this combined proceeding/action. Although exhaustion is generally required before a party may seek judicial review of an agency's action, the rule does not apply when "resort to an administrative remedy would be futile" ( Watergate II Apts. v. Buffalo Sewer Auth., 46 N.Y.2d 52, 57, 412 N.Y.S.2d 821, 385 N.E.2d 560 [1978] ). Here, as previously noted, PERB's Director of Conciliation had advised petitioner during the fourth arbitration that it was PERB's position that it did not have jurisdiction to disqualify Linn as the City's party-arbitrator. PERB then implicitly reiterated that position by designating Linn as the party-arbitrator in the fourth arbitration over petitioner's objections, by failing to respond to petitioner's objections to Linn's reappointment at the outset of the current arbitration, and by again designating Linn as the City's party-arbitrator. Indeed, in its cross motion to dismiss the petition/complaint in Supreme Court, PERB

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repeated its position that it has no authority to disqualify the City's selected party-arbitrator and stated that this position was the reason for PERB's failure to respond to petitioner's objections to Linn's selection. Given these consistent expressions of PERB's position, Supreme Court did not err in concluding that it would have been futile to require petitioner to seek further administrative...