Opinion
125587
04-02-2019
MITCHELL, MAXWELL & JACKSON, INC., Steven M. Knobel, and MMJ Appraisal Management, Inc., Claimants, v. STATE of New York, Defendant.
For Claimant: Shaw & Binder, P.C. By: Daniel S. LoPresti, Esq. For Defendant: Letitia James, New York State Attorney General By: Ellen S. Mendelson, Assistant Attorney General
For Claimant: Shaw & Binder, P.C. By: Daniel S. LoPresti, Esq.
For Defendant: Letitia James, New York State Attorney General By: Ellen S. Mendelson, Assistant Attorney General
David A. Weinstein, J. In this action, claimants Mitchell, Maxwell & Jackson ("MMJ"), MMJ Appraisal Management, Inc., Steven M. Knobel and Jeffrey Jackson allege that defendant State of New York is liable for malicious prosecution and other violations of state law arising out of administrative proceedings brought by the New York State Department of State ("DOS") to revoke Knobel's appraisal license. The case was premised on accusations by a former employee that MMJ appraisal reports contained forged signatures. An administrative determination upholding the charges was challenged in Supreme Court by an Article 78 petition, and was ultimately annulled in that proceeding. Claimants argue that the charges against them lacked a factual basis, and that they were denied due process during the administrative proceedings.
The matter is now before me on a discovery dispute first raised at a conference before the Court on December 19, 2018, and addressed in subsequent letter briefs. The dispute concerns claimants' efforts to depose Roger Schneier, the DOS administrative law judge ("ALJ") who presided over the administrative hearing at which the charges against claimants were initially upheld, and which is at the heart of their allegations in this case.
By letter submitted February 1, 2019 ("Def Ltr"), the State seeks an order barring the testimony, on the ground that (1) a judge cannot be called to testify about "the reasons which led to his findings of fact and conclusions of law in a particular matter over which he presided," or otherwise about his or her thought processes (Def Ltr at 1, citing In re Estate of Sheen , 145 Misc. 2d 920, 548 N.Y.S.2d 618 [Sur. Ct., Bx. Cty. 1989] ); and (2) the testimony is not material and necessary, since a record of the proceedings exists, and any effort to ask Schneier to "elaborate on his written decision" would be "redundant, cumulative and irrelevant," as Schneier cannot "add[ ] to his written decision or explain[ ] his reasoning beyond his written word ex post facto" (id. at 2). Claimants have responded by letter dated February 22, 2019 ("Cl Ltr"). They argue that Schneier was a key player in the events underlying the claim at issue, and that questions regarding his "true motivations, biases and prejudices" are directly relevant to the malicious prosecution cause of action (Cl Ltr at 2). In particular, they point to emails indicating that Schneier had communications with members of the Department's prosecutorial team regarding adjournment of the hearing date, and wish to question him about ex parte communications (Cl Ltr at 2 & Ex A). They seek specifically to probe into the rationale for his decision, including why he discounted the testimony of particular witnesses.
They also wish to ask about what claimants characterize as his bias in favor of the prosecution, citing as evidence for such bias, inter alia , his exclusion of a deposition transcript because of his stated displeasure with how claimants' original counsel "conducts himself," on the basis of which he would not "burden this proceeding with a transcript ... from" that attorney (Cl Ltr at 3, Ex D).
Claimants further argue that Schneier, as an ALJ, should not be subject to the restrictions generally imposed on taking the testimony of judges, and which the State cites to justify the limitations it seeks to place on his testimony. Finally, they contend that the State has waived its objections by pleading a defense of legal justification.
DISCUSSION
The parties to a civil action are entitled to "full disclosure of all matter material and necessary in the prosecution or defense of an action," unless it is privileged or work product ( CPLR 3101[a] ). Under this broad standard, a party may discover "any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity" ( Allen v. Crowell—Collier Publ. Co. , 21 N.Y.2d 403, 406, 288 N.Y.S.2d 449, 235 N.E.2d 430 [1968] ). Thus, "[i]f there is any possibility that the information is sought in good faith for possible use as evidence-in-chief or for cross-examination or in rebuttal, it should be considered [matter] ‘material’ in the action" ( Vargas v. Lee, 170 A.D.3d 1073, 96 N.Y.S.3d 587 [2d Dept. 2019] [citations omitted] ). Here, defendant maintains that whatever relevance ALJ Schneier's testimony may have, a judge's testimony regarding his thoughts and opinions about a proceeding that was before him is privileged against disclosure. This argument is consistent with a "cardinal principle of Anglo-American jurisprudence[:] a court speaks only through its minutes" ( Perkins v. LeCureux , 58 F.3d 214 [6th Cir. 1995] ), and thus "post-decision statements by a judge ... about his mental processes in reaching a decision may not be used as evidence in a subsequent challenge to the decision " ( id. at 220 [citing Proffitt v. Wainwright , 685 F 2d 1227, 1255 [11th Cir 1982] [emphasis in original] ). Moreover, while the above language specifically addresses only subsequent attacks on the decision at issue as to which the testimony is sought, the same principle applies to any testimony by a judge about his thoughts behind a judicial ruling (see Washington v. Strickland , 693 F.2d 1243 [5th Cir. 1982] [in banc], rev'd on other grounds , 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674 [1984] ["It is a firmly established rule in our jurisprudence that a judge may not be asked to testify about his mental processes in reaching a judicial decision"]; Morrison v. Kimmelman , 650 F. Supp. 801, 807 [D. N.J. 1986] ["the trier of fact is not to be placed on the witness stand and cross examined as to the reasons for the outcome, absent evidence of improprieties in the decision making process itself "] ).
I address the "improprieties" exception below.
The foundations of this rule were set forth by the United States Supreme Court's decision in Fayerweather v. Ritch , 195 U.S. 276, 25 S.Ct. 58, 49 L.Ed. 193 [1904]. In that case, the Court reversed a determination rejecting the res judicata effect of an earlier judgment on the basis of the judge's testimony that he had not considered certain matters. The Supreme Court reasoned as follows:
"A judgment is a solemn record. Parties have a right to rely upon it. It should not lightly be disturbed and ought never to be overthrown or limited by the oral testimony of a judge or juror of what he had in mind at the time of the decision"
The Supreme Court has in certain limited circumstances relaxed the ban on questioning jurors regarding their deliberations (see e.g. Peña-Rodriguez v. Colorado , ––– U.S. ––––, 137 S. Ct. 855, 197 L.Ed.2d 107 [2017] [allowing jurors in criminal trial to be questioned on whether the verdict was tainted by racially discriminatory motives] ). I have found no decision or language which reads such greater leeway in criminal cases to warrant relaxation on the prohibition against questioning judges about their thoughts, analysis, or bias underlying a decision they had previously made.
( id. at 307, 25 S.Ct. 58 ).
Although there is limited caselaw in New York on this issue, such as exists is fully consistent with these principles. Thus, in Ludwig v. Walker , 138 A.D. 850, 123 N.Y.S. 468 [1st Dept. 1910], the Court reversed the modification of a judgment, when the modification had been based on a judge's testimony regarding his intent in a prior ruling, quoting and relying upon the above language from Fayerweather . And in Matter of Sheen, supra , the Court found that "a judge shall not be permitted to testify as to the reasons which led to his findings of fact or conclusions of law in a particular matter over which he presided" ( 145 Misc. 2d at 922, 548 N.Y.S.2d 618 ). This principle precludes the questioning of a judge in a malicious prosecution case to testify as to the basis of his or her decision allowing such prosecution to go forward, or even to explore potential biases or conflicts of interest (see Drake v. Village of Johnstown , 2011 WL 4091846 [S.D. Oh. 2011] [under Fayerweather and its progeny, judge could not be questioned in malicious prosecution suit as to basis for directing that plaintiff be jailed, or as to whether he was "acting as a tax collector, rather than a judge"] ).
Claimants argue that defendant is not entitled to assert any privilege applicable to judicial testimony, since Mr. Schneier was an ALJ or "hearing officer," who was "controlled by the agency prosecuting the underlying administrative proceeding" (Cl Ltr at 4 & n 3). Claimants analogize this situation to that of "the District Attorney's Office employing the presiding judge" (id. ).
Whatever the surface appeal of such an argument, it is not consistent with administrative law and procedure. New York law recognizes that there is a "combination of investigatory, prosecutory and quasi-judicial functions in a single administrative agency"( Matter of Mauro v. Division of Hous. & Community Renewal , 250 A.D.2d 392, 392, 672 N.Y.S.2d 347 [1st Dept. 1998] ). Thus, ALJs like Schneier have been deemed "quasi-judicial" officers, and are generally subject to the same strictures and privileges applicable to judges generally (see e.g. Matter of Beer Garden v. New York State Liq. Auth., 79 N.Y.2d 266, 278, 582 N.Y.S.2d 65, 590 N.E.2d 1193 [1992] ["the common-law rule of disqualification embodied by the statute [and applicable to courts of record] has been applied to administrative tribunals exercising quasi-judicial functions"]; Tarter v. State , 68 N.Y.2d 511, 510 N.Y.S.2d 528, 503 N.E.2d 84 [1986] [administrative officials carrying out "quasi-judicial" functions entitled to judicial immunity]; Matter of Crosson v. Newman , 178 A.D.2d 719, 720, 576 N.Y.S.2d 950 [3d Dept. 1991] ["nonjudicial employees performing quasi-judicial duties such as Administrative Law Judges" are subject to Code of Judicial Conduct] [citation omitted]; Desalvatore v. Washburn , 192 Misc. 2d 321, 324-325, 747 N.Y.S.2d 695 [Sup. Ct., Oneida Cty. 2002] [statements in "quasi-judicial" proceedings before ALJ subject to absolute privilege, as in judicial proceedings]; see also Schweiker v. McClure , 456 U.S. 188, 195, 102 S.Ct. 1665, 72 L.Ed.2d 1 [1982] [proceedings before ALJ are "quasi-judicial"] ).
Indeed, the United States Supreme Court has extended the testimonial privilege articulated in Fayerweather to administrative officials who carry out quasi-judicial functions. Thus, in United States v. Morgan , 313 U.S. 409, 61 S.Ct. 999, 85 L.Ed. 1429 [1941] ), the Court barred the Secretary of Agriculture from being questioned in regard to a proceeding in which he "dealt with the enormous record in a manner not unlike the practice of judges in similar situations" ( id. at 422, 61 S.Ct. 999 ). Citing Fayerweather , the Court held that since the matter before the Secretary "ha[d] a quality resembling that of a judicial proceeding" he "should never have been subjected to this examination" about the rationale for his decision, just as "[s]uch an examination of a judge would be destructive of judicial responsibility" and a judge "cannot be subjected to such a scrutiny" ( id. ).
In this case, the role played by Schneier — evaluating the evidence presented to him, making findings of fact and conclusions of law, and imposing a sanction following a hearing at which evidence was presented — consisted of "classically judicial tasks" (see Tarter , 68 N.Y.2d at 518, 510 N.Y.S.2d 528, 503 N.E.2d 84 ). Under the caselaw cited above, there is no reason he should be treated differently than judges in the court system for purposes of discovery generally, or in regard to any testimonial privilege in particular. Claimant notes that its amended claim encompasses allegations concerning Schneier, charging that he rendered his decision "maliciously, without basis in law or fact, and in violation of Claimants' due process rights" (see Amended Claim ¶ 61). But the caselaw makes clear that the elements of malicious prosecution must be established via the actions of those individuals who prosecuted the case, not as to a judge who ruled on an aspect thereof, and distinguishes the prosecutor's role from that of judicial and quasi-judicial officials involved in the case. For example, findings by an ALJ have been given estoppel effect in malicious prosecution cases, and are thus treated by the court as binding, rather than reviewed for improper motive (see Janendo v. Town of New Paltz Police Dept. , 211 A.D.2d 894, 621 N.Y.S.2d 175 [3d Dept. 1995] [decision of ALJ at license revocation hearing had collateral estoppel effect on issue of probable cause]; Regent v. Town of Cheektowaga , 2007 WL 981771, at *6 [W.D. N.Y. 2007] [noting in regard to malicious prosecution claim that "under New York law, preclusive effect would be given to the ALJ's finding in the course of the DMV's license revocation hearing"] ).
The fact that claimants have included allegations against the ALJ in their claim does not automatically make them relevant to the underlying cause of action. To the contrary, the above-cited allegations in regard to Schneier fall squarely within the protections of judicial immunity (see Tarter , 68 N.Y.2d at 518, 510 N.Y.S.2d 528, 503 N.E.2d 84 [judges — including administrative officials acting in a quasi-judicial capacity — "have long been immune" from liability even from suits "alleging that their decisions were tainted by improper motives"] ).
In addition, I see no relevance of any testimony that would be given by Schneier in regard to his personal biases or thought processes that produced his ruling. To prove a cause of action for malicious prosecution, claimants will need to show "commencement or continuation of a judicial proceeding, malice, want of probable cause, and the successful termination of the precedent action" ( G & T Terminal Packaging Co., Inc. v. Western Growers Ass'n , 56 A.D.3d 266, 268, 867 N.Y.S.2d 58 [1st Dept. 2008] [citations omitted] ). I do not see how Mr. Schneier's testimony on the subjects suggested would be material to any of these questions, even if it were not deemed privileged.
Schneier's testimony bears no relevance to the issues of commencement or continuation, or successful termination of the prosecution. The element of malice requires some inquiry into the motives of those involved in the prosecution of the claims, and thus depends on inferences drawn from particular facts and circumstances (see Martin v. City of Albany , 42 N.Y.2d 13, 17, 396 N.Y.S.2d 612, 364 N.E.2d 1304 [1977] ). Claimant states that Schneier's "motivation, bias and prejudices are in issue in this action," as his actions show that "the prosecutorial team and ALJ Schneier, all employees of the State, were on the same side — against Claimants" (Cl Ltr at 2). It thus seeks to probe these issues at deposition.
But the ALJ's malice is not relevant here, i.e., his administrative determination is not part of the "commencement and continuation" of a judicial proceeding. As noted above, courts have viewed ALJs as playing a quasi-judicial role — even if they are within the same agency carrying out the prosecution. For that reason, Schneier's motives and internal thought processes are not relevant to the question of malice.
Proof that defendant initiated an action without probable cause may be shown by "demonstrating that the evidence of guilt relied upon by the defendant was so scant that the prosecution was entirely baseless and maliciously instituted" (see Torres v. Jones , 26 N.Y.3d 742, 761, 27 N.Y.S.3d 468, 47 N.E.3d 747 [2016] ). Claimants apparently wish to demonstrate something different: that the ALJ's decision upholding the charges was "irrational", "not supported by the evidence" and "violated Claimant's due process rights" (Cl Ltr at 2). But any such claims, to the extent they are relevant to this action, can be established via a showing of the evidence adduced at the hearing, and the text of the administrative determination. Any additional thoughts in Schneier's head about these matters bears no relevance to the question of probable cause.
Claimants also argue that defendant has waived its objection to the taking of Schneier's testimony by "putting [that testimony] in issue in its defense of legal justification." This contention is based on the State's Second Affirmative Defense in the Amended Answer, which reads: "The defendants, through its employees, acted properly, lawfully without malice, with reasonable and probable cause, in good faith and with legal justification."
As I noted in my Decision & Order of March 19, 2018, a party may waive a privilege if it "asserts a claim that in fairness requires examination of protected communications" ( United States v. Bilzerian , 926 F.2d 1285, 1292 [2d Cir. 1991], cert. denied , 502 U.S. 813, 112 S.Ct. 63, 116 L.Ed.2d 39 [1991] ). Such may be the case when the party "places the subject matter of the privileged communication at issue, so that invasion of the privilege is required to determine the validity of a claim or defense of the party asserting the privilege, and application of the privilege would deprive an adversary of vital information" ( Deutsche Bank Trust Co. of Ams. v. Tri-Links Inv. Trust , 43 A.D.3d 56, 63, 837 N.Y.S.2d 15 [1st Dept. 2007] [citation omitted] ). Applying this standard, I found that defendant cannot claim to have acted in good faith, and then "prevent claimants from seeing materials relevant to its decision to bring the underlying administrative proceeding" (Mar 19 D & O at 11).
Claimants argue that the same logic applies here: since defendant put the "legal basis for the administrative determination" at issue, claimants should be allowed to question Schneier about that basis (Cl Ltr at 4). That is not an accurate characterization of the defense, which in the context of a malicious prosecution claim relates to the actions of the prosecuting employees, not quasi-judicial officials. Therefore, the defense does not place at issue the internal thought processes of the ALJ who adjudicated the claim, or his particular biases. To the extent the validity of the ALJ's decision is relevant to this action, claimants have a copy of that decision along with the administrative record, and may make their arguments on that basis. What they may not do, under the caselaw cited above, is question a judge (including an ALJ) on the thinking behind the decision. Nothing in the defense places that subject at issue.
As noted in Morrison, supra, "evidence of improprieties" may serve as a potential ground for disclosure of judicial bias and thought processes. While claimants do not cite this precise language, they essentially make this argument by pointing to what they characterize as ex parte communications between Schneier and members of the DOS prosecution team (see Cl Ltr at 2 & Ex A). The emails which purport to show this concern an adjournment of the hearing, which is a topic generally exempt from the prohibition on ex parte communication (see NY Rules of Judicial Conduct § 100.3[B][6][A] ["Ex parte communications that are made for scheduling or administrative purposes and that do not affect a substantial right of any party are authorized, provided the judge reasonably believes that no party will gain a procedural or tactical advantage as a result of the ex parte communication, and the judge, insofar as practical and appropriate, makes provision for prompt notification of other parties or their lawyers of the substance of the ex parte communication and allows an opportunity to respond"] ). For this reason, I do not find that communications between a party and a hearing officer related solely to scheduling are sufficient evidence of wrongdoing to undo the bar against questioning a judge on the reasons for his judicial opinion (see U.S. v. Hooker Chemicals & Plastics Corp. , 123 F.R.D. 3, 22 n. 36 [W.D. N.Y. 1988] ["To trigger the ‘impropriety’ exception to the mental processes privilege ... the party seeking discovery must make a prima facie showing that impropriety exists"] ).
I express no view here as to whether an ALJ must follow this precise rule, or whether Schneier did so in this instance. The point is that, to the extent certain improprieties are of sufficient gravity to lift the veil on judicial thought processes, an ex parte communication about scheduling is not one of them.
For all these reasons, I grant defendant's application to the extent that I direct that claimants are precluded from questioning ALJ Schneier about his rulings and thought processes at the hearing.
That leaves one final matter. Although the matter is not free from doubt, there is some authority indicating that the privilege discussed above does not bar a judge from giving testimony on factual matters relating to a proceeding that had been before him, rather than his bias, reasoning, etc. (see Estate of Sheen , 145 Misc. 2d at 923, 548 N.Y.S.2d 618 [no rule "precludes a judge from testifying in a subsequent proceeding about events which anyone could have observed had they been present at the prior proceeding before the judge"]; but see Baghoomian v. Basquiat , 167 A.D.2d 124, 561 N.Y.S.2d 212 [1st Dept. 1990] [judicial official may not be compelled to testify in separate proceeding about what transpired during settlement discussions]; Matter of Herald Companies, Inc. v. Town of Geddes , 122 Misc. 2d 236, 238, 470 N.Y.S.2d 81 [Sup. Ct., Onondaga Cty. 1983] ["A Judge should not be required to testify for or against litigants who appeared before him"] ). Ex parte communications from prosecutors which reflected their malice, for example, might fall within this principle. But I see no such relevance in communications between the ALJ and DOS officials responsible for the prosecution of the MMJ matter about scheduling. In light of the strict limitations on judicial testimony set forth above, claimants have not articulated a valid basis to question Schneier on factual matters, and thus have failed to show that his testimony would be material at this time. In the event they uncover specific evidence in their questioning of other individuals that Schneier is privy to factual information relevant to the elements of claimants' causes of action, claimants may then seek to revisit my ruling, but solely in this regard.
Estate of Sheen found such testimony could be taken in a subsequent proceeding; there is universal agreement that there is an "absolute prohibition[ ]" against a judge testifying in the matter before him or her (145 Misc. 2d at 922, 548 N.Y.S.2d 618 ).
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In light of the foregoing, claimants' are barred at this time from taking the testimony of ALJ Schneier, without prejudice to claimants revisiting the question as to deposing Schneier on specific factual matters upon a sufficient showing in accordance with the above.