Walton v. New York State Department of Correctional Services
| Decision Date | 14 December 2007 |
| Docket Number | No. 01-04-ST4340,01-04-ST4340 |
| Citation | 18 Misc.3d 775,849 N.Y.S.2d 395,2007 NY Slip Op 27547 |
| Parties | IVEY WALTON et al., on Behalf of Themselves and All Others Similarly Situated, Petitioners, v. NEW YORK STATE DEPARTMENT OF CORRECTIONAL SERVICES et al., Respondents. |
| Court | New York Supreme Court |
Center for Constitutional Rights, New York City (Rachel Meeropol of counsel), and Community Service Society, New York City (Juan Cartagena and Craig Acorn of counsel), for petitioners.
The individual petitioners are family members and/or friends of inmates incarcerated within the New York State prison system. The Office of Appellate Defender and the New York State Defenders Association are nonprofit organizations which provide legal services to state inmates. All petitioners are or have been recipients of collect telephone calls from state inmates. The petitioners argue that they are being overcharged for the collect telephone calls which they receive.
Pursuant to a contract dated April 1, 1996 with MCI,1 the New York State Department of Correctional Services (hereinafter DOCS) instituted a program that permitted inmates to make telephone calls to designated friends or family from coinless telephones by use of a collect call system. The contract with MCI was the result of a competitive bidding process. Bidders were required to meet extensive security and monitoring requirements, which included the capacity to block, store and record all phone calls. The bid proposal contained a requirement that DOCS receive a commission of no less than 47% of the gross monthly revenue generated by these calls. As required by statute, MCI filed its interstate telephone rates with the Federal Communications Commission, and filed its intrastate rates with the Public Service Commission (hereinafter PSC; see 47 USC § 201; Public Service Law § 92). As relevant here, on December 16, 1998, the PSC approved the proposed rates, which included a 60% commission paid to DOCS from the proceeds collected by MCI.
In April 2001, MCI and DOCS entered into a new contract that required MCI to continue charging the same rate, but decreased the commission collected by DOCS from 60% to 57.5% of MCI's gross annual revenues. In May 2003, DOCS and MCI agreed to amend the 2001 contract, to leave the 57.5% commission intact, but introduce a flat rate for all calls without regard to the time of day or distance of the call (16¢ per minute with a single surcharge of $3 per call). The State Comptroller approved the amendment on July 25, 2003. On August 14, 2003 MCI filed a revised tariff with the PSC which incorporated the change. Although there was no formal hearing, several individuals and organizations, including two of the petitioners in the instant proceeding, filed timely comments with the PSC. They argued, among other things, that the inmate telephone system violated the constitutional rights of DOCS inmates and their families.2 In its order dated October 30, 2003, the PSC determined that while it had jurisdiction over MCI, it did not have jurisdiction over DOCS, because the latter is not a telephone corporation. Based on the foregoing, it declined to review the portion of the tariff attributable to the 57.5% commission MCI was to pay to DOCS. The PSC approved as just and reasonable what it termed the "jurisdictional" portion of the rate, which corresponded to the 42.5% portion retained by MCI. The PSC directed MCI to file new tariffs which separately identified the unreviewed rate and the "jurisdictional" rate. Both rates were included in the amended tariff subsequently filed with the PSC. On February 26, 2004, the petitioners commenced the instant combined action/proceeding to challenge the 57.5% commission paid by MCI to DOCS. The petition sought judgment: (1) declaring the 57.5% commission to be illegal and a violation of petitioners' constitutional rights; (2) enforcing the PSC's October 30, 2003 order and permanently enjoining DOCS and MCI from imposing charges above the "jurisdictional rate" filed with the PSC; (3) permanently enjoining DOCS and MCI from enforcing certain portions of their contracts; (4) directing DOCS and MCI to provide an accounting; (5) directing DOCS and MCI to make certain refunds to petitioners and class members; and (6) awarding costs and disbursements of the proceedings.
Upon commencement of the instant proceeding, the respondents made a motion to dismiss pursuant to CPLR 7804 (f) and 3211 (a) on grounds, inter alia, that the proceeding was time-barred under CPLR 217. The court, by decision/order/judgment dated October 8, 2004, found that the proceeding was untimely and dismissed the petition. The Third Department, Appellate Division, affirmed (see Walton v New York State Dept. of Correctional Servs., 25 AD3d 999 [2006]). The Court of Appeals modified the order of the Appellate Division by reinstating the second through fifth causes of action, holding that the proceeding as to these causes of action (which allege violations of petitioners' constitutional rights) was timely (see Walton v New York State Dept. of Correctional Servs., 8 NY3d 186 [2007]). The Court of Appeals remitted the matter to Supreme Court to determine whether the constitutional claims state a cause of action.3
It is well settled that, in response to a motion pursuant to CPLR 3211, pleadings shall be liberally construed, the facts as alleged accepted as true, and every possible favorable inference given to plaintiffs (see Nonnon v City of New York, 9 NY3d 825 [2007]; Leon v Martinez, 84 NY2d 83, 87 [1994]). On such a motion, the court is limited to examining the pleading to determine whether it states a cause of action (see Guggenheimer v Ginzburg, 43 NY2d 268, 275 [1977]). In examining the sufficiency of the pleading, the court must accept the facts alleged therein as true and interpret them in the light most favorable to the plaintiff (see Nonnon v City of New York, supra; Leon v Martinez, supra). Only affidavits submitted by the plaintiff in support of his or her causes of action may be considered on a motion of this nature (see Rovello v Orofino Realty Co., 40 NY2d 633, 635-636 [1976]). On such a motion, the court's sole inquiry is whether the facts alleged in the complaint fit within any cognizable legal theory, not whether there is evidentiary support for the complaint (see Leon v Martinez, supra; Pietrosanto v NYNEX Corp., 195 AD2d 843, 844 [3d Dept 1993]).
In addition, where declaratory relief is requested, "[i]n deciding a motion to dismiss for failure to state a cause of action, a court must liberally construe the allegations to determine if a bona fide justiciable controversy exists" (Matter of Niagara Mohawk Power Corp. v State of New York, 300 AD2d 949, 952 [3d Dept 2002], citing Matter of Schulz v New York State Legislature, 230 AD2d 578, 582 [1997], lv denied 95 NY2d 769 [2000]).
Violation of Power To Tax (Count II)
Count II of the petition alleges that DOCS exceeded its power by imposing an unlawful tax upon the petitioners through the collection of the DOCS commission, in violation of New York Constitution, article III, § 14 and article XVI, § 1.5 The respondents maintain that the DOCS commission is not a tax, but rather is part of a tariff which was approved by the PSC.
Public Service Law § 97, entitled "Rates, rentals and service," recites as follows:
Distilled to its essence, Public Service Law § 97 (1) recites that the PSC "shall ... determine the just and reasonable rates ... to be thereafter observed and in force as the maximum to be charged ... notwithstanding that a higher or lower rate, charge or rental has been theretofore prescribed by general or special statute, contract, grant, franchise condition, consent or other...
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Walton v. Correctional Servs.
...concluded that petitioners failed to state cognizable claims for relief, warranting dismissal of the verified petition and complaint (18 Misc 3d 775 [2007]). The Appellate Division unanimously agreed with Supreme Court's treatment of the constitutional claims and also addressed DOCS' altern......