In the Matter of Gerald E. Loehr et al., Respondents,v.Administrative Board of the Courts of the State of New York, Appellant.BriefN.Y.March 21, 2017APL-20 1 5-00310 To Be Argued By: Robert A. Spolzino Time Requested: 12 Minutes Albany County Clerk:'> Index No. 6818113 Appellate Division, Third Department Docket No. 519568 cteourt of ~ppeals STATE OF NEW YORK GERALD E. LOEHR, J. EMMETT MURPHY and WILLIAM MILLER, Plaintijfs-Petitioners-Re.~pondents, against THE ADMINISTRATIVE BOARD OF THE COURTS OF TilE STATE OF NEW YORK, Defendant-Respondent-Appellant. BRIEF FOR PLAINTIFFS-PETITIONERS-RESPONDENTS Of Counsel: Robert A. Spolzino Eliza M. Scheibel Date Completed: May 17. 2016 WILSON ELSER MOSKOWITZ EDELMAr\ & DICKER LLP Attorneys for Plaintif}.~-Petitioners- Respondents 1133 Westchester Avenue White Plains, New York 10604 914-323-7000 ~----- -- TABLE OF CONTENTS PRELIMINARY STATEMENT .................................................................... 1 QUESTIONS PRESENTED ........................................................................... 4 STATEMENT OF FACTS ............................................................................. 5 ARGUMENT ................................................................................................ 18 I The Administrative Board's new policy and its action here violate Retirement and Social Security Law § 212, Judiciary Law§ 115 (3) and Article V, § 7 of the New York State Constitution, which are statutory and constitutional provisions 6007427v.l unrelated to the certification process ............................................. 19 A. The Administrative Board's new policy violates the explicit text and statutory purpose of Retirement and Social Security Law§ 212 and Judiciary Law§ 115(3) .............................. 19 B. State policy, as established by the Legislature, permits certificated Justices to receive both their retirement benfits and their salaries .................................................................. 21 C. Retirement and Social Security Law § 212 supersedes Retirement and Social Security Law§ 101 (c) .................... 25 D. The Administrative Board's new policy violates Judiciary Law § 115(3) by establishing two classes of Supreme Court Justices with different benefits ............................................ 27 E. By Denying Justices Loehr, Murphy and Miller their rights under Retirement and Social Security Law§ 212, the Administrative Board impermissibly impaired their pension benefits in violation of Article V, § 7 of the New York State Constitution .............................................. 28 F. Marro does not authorize the Administrative Board to violate statutory and constitutional provisions independent of the certification process .................................................. 35 II The Administrative Board's new policy and the application of that policy to Justices Loehr, Murphy and Miller must be set aside as arbitrary and capricious, beyond the authority of the Administrative Board and erroneous as a matter of law ............... 36 A. A Justice's receipt of retirement benefits is irrelevant to determining whether the Justice's services are "necessary" and he or she is "mentally and physically able." ................ 38 B. Marro does not authorize the Administrative Board to adopt certification criteria beyond those established by Judiciary Law§ 115 ............................................................................ 45 III The Administrative Board's new policy is invalid because it was never approved by the Court of Appeals .............................. 50 A. The Administrative Board's new policy violates the statutory and constitutional requirement of "multistage, multiperson review." ........................................................... 52 B. This Court may consider the procedural propriety of the new policy ................................................................................... 58 CONCLUSION ............................................................................................. 60 11 6007427v.l TABLE OF CASES AND AUTHORITIES Cases Ahr v. City of New York, 243 A.D.2d 293 (1st Dep't 1997) ......................... 33 Baker v. Regan, 68 N.Y.2d 335 (1986) ........................................................ 24 Ballentine v. Koch, 89 N.Y.2d 51 (1996) ..................................................... 33 Bingham v. New York City Transit Auth., 99 N.Y.2d 355 (2003) ................ 25 Brady v. Williams Capital Grp., L.P., 64 A.D.3d 127 (1st Dep't 2009) ...... 26 Civil Service Employees Ass 'n, Inc. v. Regan, 129 A.D.2d 378 (3d Dep't 1987) .............................................................. 28 Frostv. R.R. Comm'n of State of Cal., 271 U.S. 583 (1926) ....................... 21 Guzman v. New York City Employees Retirement Sys., 45 N.Y.2d 186 (1978) .............................................................................. 29 Hagler v. Paterson, 30 Misc.3d 684 (Sup. Ct. Albany Co., 2010) .............. 24 Larson v. Albany Med. Center, 252 A.D.2d 936 (3d Dep't 1998) ............... 59 Law Enforcement Officers Union v. State of New York, 168 Misc.2d 781 (Sup. Ct. Albany Co., 1995) .......................................... 44 Loehr v. Administrative Bd. of the Court of the State of New York, 130 A.D.3d 89 (3d Dep't 2015) .............................................. 16, 17, 38, 52 Matter of Marro v. Bartlett, 46 N.Y.2d 674 (1979) .............................. passim McCall v. State of New York, 170 Misc.2d 644 (Sup. Ct. Albany Co., 1995) .......................................... 29 McDermott v Regan, 82 N.Y.2d 354 (1993) .......................................... 29, 34 Misicki v. Caradonna, 12 N.Y.3d 511 (2009) .............................................. 58 Morganthau v. Cooke, 85 A.D.2d 463 (1st Dep't 1982) ...... 52, 53, 54, 55,56 Ill 6007427v.l Mulligan v. Lackey, 33 A.D.2d 991 (4th Dep't 1970 ................................... 43 People v. McDaniel, 295 A.D.2d 371 (2d Dep't 2002) ................................ 26 Persky v. Bank of America, N.A., 261 N.Y. 212 (1933) ............................... 60 Public Employees Federation, AFL-CIO v. Cuomo, 62 N.Y.2d 450 (1984) ................................................................................ 34 Roberts Real Estate, Inc. v. New York State Dep't of State, 80 N.Y.2d 116 (1992) ......................................................................... 35, 39 Swalbach v State Liquor Auth., 7 N.Y.2d 518 (1960) ............................ 36, 39 Telaro v. Telaro, 25 N.Y.2d 433 (1969) ....................................................... 59 Village of Fairport v. Newman, 90 A.D.2d 293 (4th Dep't 1982) ............... 28 Way v. Grantling, 289 A.D.2d 790 (3d Dep't 2001) .................................... 39 Wickham v. Liberty Mut. Ins. Co., 73 A.D.2d 742 (3d Dep't 1979 .............. 43 Statutes Article V, § 7 of the Constitution ............................... 4, 16, 18, 19, 28, 29, 34 Article VI, § 25 of the New York State Constitution ............................ passim Article VI,§ 28(c) of the New York State Constitution ........................ passim Civil Service Law § 150 ......................................................................... 20, 25 Judiciary Law§ 115(3) ..................................... 2, 5, 16, 17, 19, 27, 28, 31,35 Judiciary Law § 211 ............................................................................... passim Retirement and Social Security Law§ 101(c) ...................... 20, 21, 25, 26, 27 Other Authorities 2002 Sess. Law News of N.Y. Ch. 474 (N4190-A) (McKinney's) ...... 22,23 lV 6007427v.l PRELIMINARY STATEMENT The Administrative Board's authority with respect to the certification of retired Justices of the Supreme Court does not extend to unilaterally adopting a statewide policy which changes the constitutional and statutory requirements for certification, ignores the constitutional and statutory rights of retirees and bears no rational relationship to the purposes served by certification. And, although the Appellate Division did not reach the issue, the new policy is invalid for the additional reason that the Administrative Board failed to comply with Article VI, § 28(c) of the New York State Constitution and Judiciary Law § 211 (2) in adopting it. The Appellate Division's order should be affirmed. "Double-dipping" is a misnomer. A retired Justice would be "double- dipping" if he or she were being paid twice for the same work. But that is not what happens when a Justice who is receiving retirement benefits is certificated. Justices Loehr, Murphy and Miller are retirees who have returned to work. They each earned (and contributed to) the retirement benefits they are now receiving through their prior, pre-certification, employment. The salaries they are earning now are the result of their current employment as certificated Justices, without adding anything to their retirement benefits. 6007427v.l Retirement and Social Security Law § 212 explicitly gives them the right to receive both the retirement benefits they have already earned and a salary for their current work by providing that any retired state employee over the age of 65 may be employed by the state "without loss, suspension or diminution of his or her retirement allowance." The Administrative Board's new policy violates Article V, § 7 of the Constitution, Retirement and Social Security Law § 212, and Judiciary Law § 115(3) because it deprives Justices Loehr, Murphy and Miller of their right to elect whether to continue to receive their retirement benefits by requiring that they suspend and forfeit the benefits they have already earned, which both the constitution and the statute protect from being diminished, in order to be certificated, and, by doing so, creates a class of certificated Supreme Court Justices with fewer rights than those not yet certificated. The policy is also procedurally invalid because it was never approved by the Court of Appeals, as required by Article VI, § 28(c) of the New York State Constitution and Judiciary Law § 211. Even if the Administrative Board's new policy did not violate Article V, § 7 and Article VI, § 25(b) of the Constitution and Retirement and Social Security Law§ 212, Judiciary Law§§ 115(3) and 211, it must be set aside as arbitrary and capricious and erroneous as a matter of law because it is based 2 6007427v.l on criteria that are not among the criteria established by the Constitution or Judiciary Law § 115 for certification, are not rationally related to the certification process and serve no legitimate governmental purpose. Under any common understanding of the word "necessary," the fact that a Justice is receiving retirement benefits earned, in part, through prior judicial service is irrelevant to whether his or her services "are necessary to expedite the business" of the Supreme Court and is, therefore, not a rational basis for denying certification. The Administrative Board's position that under Matter of Marro v. Bartlett, 46 N.Y.2d 674 (1979), its power knows no limits, is untenable. It stretches the holding of Marro beyond recognition and ignores this Court's ruling that actions of the Administrative Board are not beyond judicial review when there is a claim of "a violation of constitutional or statutory prescription unrelated to the certification process itself." 46 N.Y.2d at 677. Marro recognized that the Administrative Board has broad discretion to apply the statutory certification criteria established by Judiciary Law § 115 to individual applicants for certification. It did not give the Administrative Board the legislative power to engraft new criteria onto the statute or empower it to ignore the requirements of Article VI, § 28( c) of the New York State Constitution and Judiciary Law § 211 when adopting new 3 6007427v.l system-wide policies regarding judicial personnel. Nor does Marro authorize the Administrative Board to violate state statutes and ignore state and federal constitutional rights. What the Administrative Board's new policy does, and should not be permitted to do, is to arbitrarily demonize a handful of retired Justices and effectively prohibit them from receiving hard-earned retirement benefits, to which they are legally and constitutionally entitled, for the impermissible purpose of political appeasement. The new policy directly contradicts state law, which permits a retired state employee over the age of 65 to elect to receive both retirement benefits and a salary, and is invalid for that reason alone. Since the Administrative Board has already determined that Petitioners satisfy the constitutional and statutory criteria for certification, this Court should affirm the order of the Appellate Division. QUESTIONS PRESENTED 1. Does the Administrative Board's policy of refusing to certificate Justices of the Supreme Court who are receiving retirement benefits by reason of prior judicial service violate their right to those benefits under Article V, § 7 of the New York State Constitution, Retirement and Social Security Law § 212, which entitles a retired state employee over the age of 65 to be employed by the state without regard to the receipt of retirement 4 6007427v.l benefits, and Judiciary Law § 115(3), which prohibits the creation of different classes of Supreme Court Justices? Yes. 2. Did the Administrative Board exercise its authority under Article VI, § 25(b) of the New York State Constitution and Judiciary Law § 115 arbitrarily and capriciously by adopting a policy prohibiting the certification of a Justice of the Supreme Court who is receiving retirement benefits from prior judicial service in the Unified Court System and then applying that policy to deny certification to Justices Loehr, Murphy and Miller after otherwise finding that they are each mentally and physically capable of service and their services are necessary to expedite the business of the Supreme Court? Yes. 3. Is the statewide policy with respect to the certification of Justices of the Supreme Court that has been announced by the Chief Administrative Judge invalid and unenforceable because it was never approved by the Court of Appeals, as required by Article VI, § 28(c) of the New York State Constitution and Judiciary Law § 211? Yes. STATEMENT OF FACTS On October 17, 2013, the Chief Administrative Judge of the State of New York, the Honorable A. Gail Prudenti, signed an administrative order imposing a new policy applicable to all retired Supreme Court Justices 5 6007427v.l seeking to continue their service by certification. That order provides as follows: Pursuant to the authority vested in me, and with the advice and consent of the Administrative Board of the Courts, I hereby give notice that, effective immediately, it shall be the policy of the Administrative Board that no judge henceforth certificated for service as a Justice of the Supreme Court pursuant to Judiciary Law §115 may receive, concurrent with receipt of a salary for such service, a retirement allowance for prior judicial service within the Unified Court System. R. 107-08; 111. 1 The policy was adopted one day after, and in response to, news reports, on October 15, 2013, of criticism by the Governor directed at Proposition Six, a statewide referendum strongly supported by the Office of Court Administration, which, if it had been approved by the voters, would have extended the mandatory retirement age for Judges of the Court of Appeals. R. 106; 145-46; 152. Although the Governor had not taken a public position for or against Proposition Six, it was widely reported in the press that on October 15, 2013, the Governor had expressed concern that passage would lead to more judges "double dipping." R. 106-07; 145. The next day the press reported a "hastily called meeting" of the Administrative Board of the Courts and the Chief Administrative Judge announced the new policy. R. 1 Although the policy stated that it would be applied prospectively to judges "henceforth certificated," it was in fact applied retrospectively to judges who had already been certificated. R. 63. 6 6007427v.l 106-07. The affidavit of the Chief Administrative Judge confirms that the policy was "effectuated" by the administrative order she signed on October 16, 2013. R. 107-08. The only justification the Administrative Board has offered for the new policy is its public relations value to senior court management. Article VI, § 25(b) of the New York State Constitution requires that Justices of the Supreme Court retire on the last day of the year in which they reach the age of 70. It also establishes the terms by which a retired Justice may be certificated to continue to perform the duties of that office. Pursuant to subdivision (b) of that section, "[ e ]ach such former . . . justice of the supreme court may thereafter perform the duties of a justice of the supreme court, with power to hear and determine actions and proceedings, provided, however, that it shall be certificated in the manner provided by law that the services of such . . . justice are necessary to expedite the business of the court and that he or she is mentally and physically able and competent to perform the full duties of such office." Judiciary Law § 115 is the statutory authority for the certification process. It provides, in relevant part, that "[a]ny justice of the supreme court, retired pursuant to subdivision b of section twenty-five of article six of the constitution, may, upon his application, be certified by the administrative 7 6007427v.l board for service as a retired justice of the supreme court upon findings (a) that he has the mental and physical capacity to perform the duties of such office and (b) that his services are necessary to expedite the business of the supreme court." It further provides that a "retired justice so certified shall for all purposes, ... including powers, duties, salary, status and rights, be a justice of the supreme court." Neither the Constitution nor the Judiciary Law requires that a retired Justice forego his or her retirement benefits in order to be certificated. Article VI, § 28(c) of the Constitution requires that "standards and administrative policies for general application throughout the state ... shall be submitted by the chief judge to the court of appeals, together with the recommendations, if any, of the administrative board" and that "[s]uch standards and administrative policies shall be promulgated after approval by the court of appeals." Judiciary Law § 211 echoes this language and specifically identifies "the need for additional judicial or nonjudicial personnel" as one of the matters with respect to which statewide standards must be submitted to, and may be promulgated only after approval by, the Court of Appeals. Judiciary Law § 21l(l)(a), (2). Despite these constitutional and statutory requirements, the new policy was promulgated without ever being submitted to or approved by this Court. 8 6007427v.l Petitioners-Plaintiffs Justice Gerald E. Loehr, Justice J. Emmett Murphy and Justice William Miller ("Petitioners") are all Justices of the Supreme Court. R. 23. Justice Loehr serves in Rockland County, Justice Murphy serves in Westchester County, and Justice Miller serves in Kings County. R. 45; 53-54; 69. In the spring of 2013, Justices Loehr, Murphy and Miller applied for certification pursuant to Article VI, § 25(b) and Judiciary Law § 115. R. 25; 27; 28; 45-46; 54-55; 69-70. Justices Loehr and Miller had just reached the age of 70, so each was applying for his first certification. R. 45-46; 69-70. Justice Murphy had reached the age of 70 in 2011, so he was applying for his second certification. R. 54. Each of the Justices had applied for retirement benefits pursuant to Retirement and Social Security Law § 212. Their applications had been accepted, and their benefits had been approved, by the New York State Comptroller. R. 88; 157; 339. At the time that they applied for certification, there was no policy barring the certification of a retired Justice who was receiving retirement benefits for prior judicial service in the Unified Court System. R. 24; 26; 28; 45-46; 54; 69. In fact, numerous Justices, including Justice Murphy, had been certificated previously, even while receiving such benefits. R. 27; 54. Justices Loehr, Murphy and Miller had each earned their retirement benefits through significant prior public service. Prior to the start of his 9 6007427v.l judicial service in 2005, Justice Loehr spent over 23 years in public service, beginning in 1964, in various positions in Westchester County and New York County, including Assistant District Attorney in New York County, member of the Yonkers City Council, Mayor of Yonkers and member of the Yonkers Civil Service Commission. R. 23; 44-45. Justice Loehr had become a member of the New York State and Local Retirement System in the course of his local government employment prior to his judicial service. R. 24; 45. Most of the public service by which Justice Loehr earned his retirement benefits, 74 percent, occurred prior to his judicial service within the Unified Court System. R. 24; 47. Justice Loehr's judicial service began in January 2005, after his election, at the age of 61, as a Judge of the Westchester County Court. R 23; 45. At the time he became a County Court Judge, Justice Loehr had already earned the right to retirement benefits from the New York State and Local Retirement System. R. 24; 45. Justice Loehr was elected as a Justice of the New York State Supreme Court for the Ninth Judicial District in 2012, for a 14-year term commencing on January 1, 2013. R. 24; 45. On December 31, 2012, prior to taking office as a Justice of the Supreme Court, Justice Loehr applied for and was granted retirement benefits pursuant to Retirement and Social Security Law § 212 by the New York State and Local Retirement 10 6007427v.l System, based entirely upon his public service prior to becoming a Justice of the Supreme Court. R. 24; 45. Justice Loehr began to receive retirement benefits in January 2013. R. 25. Like Justice Loehr, Justice Murphy has an extensive history of public service, beginning in 1969, including service as Special Counsel and First Deputy Corporation Counsel in the City of Yonkers. R. 25; 53. Justice Murphy's judicial career began in January 1980 when he was appointed as a Judge of the City Court of the City of Yonkers by then-Mayor (now Justice) Gerald E. Loehr. R. 25; 53. Justice Murphy has served as a full-time judge since 1980. R. 25; 53. On December 30, 2010, prior to commencing his new term of office as a Justice of the Supreme Court, Justice Murphy applied for and was granted retirement benefits pursuant to Retirement and Social Security Law § 212 by the New York State and Local Retirement System, based upon his state and local service. R. 26; 54. Justice Murphy began to receive retirement benefits in January 2011. R. 26; 54. Justice Miller also had a lengthy history of non-judicial public service from 1969 to 1983, including service as an Assistant District Attorney and Chief Assistant District Attorney. R. 27; 68-69. Justice Miller's judicial service within the Unified Court System began in 1983 when he was appointed to the Criminal Court of the City of New York by Mayor Edward 11 6007427v.l I. Koch. R. 27; 69. On December 31, 2012, prior to taking office as a Justice of the Supreme Court, Justice Miller applied for and was granted retirement benefits pursuant to Retirement and Social Security Law § 212 by the New York State and Local Retirement System based upon his state and local service prior to becoming a Justice of the Supreme Court. R 28; 69. Justice Miller began to receive retirement benefits in January 2013. R. 28. Justices Loehr, Murphy and Miller each satisfactorily completed a physical examination for certification in the spring of 2013. R. 25; 27; 28; 46; 54; 70. Each expected to be certificated or re-certificated (in the case of Justice Murphy), as their respective District Administrative Judges had advised them that their services were needed by the court. R. 46; 54; 71. On October 17, 2013, however, the Chief Administrative Judge announced the new policy. R. 29; 46; 54-55; 70. John W. McConnell, Esq., Counsel to the Unified Court System, described the policy as follows in a memorandum dated December 3, 2013 to Deputy Chief Administrative Judges Fern A. Fisher and Michael V. Coccoma: 6007427v.l The Administrative Board of the Courts has directed me to report its reconsideration of, and adherence to the policy promulgated on October 17, 2013, whereby retired Justices of the Supreme Court certificated or recertificated pursuant to Judiciary law § 115 shall not concurrently receive both a salary for such certificated service and retirement benefits for judicial service within the Unified Court System. 12 If otherwise approved for certificated or recertificated service by the Board, judges who currently receive a pension for prior judicial service will be permitted to serve if they defer or suspend such pensions during the term of certification. To avoid needless deferral or suspension - in the event an application is denied on other grounds - affected justices will be notified by the Board of their tentative approval for certification or recertification in the very near future, following closure of the period for public comment on applications. 2 R. 29; 46-47; 55; 64; 70-71. On or about December 3, 2013, the Administrative Board determined that the applications of Justices Loehr, Murphy and Miller for certification would be granted if they suspended their retirement benefits from the New York State and Local Retirement System. R. 29-30; 47; 55-56; 65; 71; 114- 116. On December 5, 2013, Justice Loehr requested in an e-mail to Mr. McConnell that the Administrative Board reconsider the application of its new policy to him, since 74 percent of the public service that had earned him his retirement benefits had occurred prior to his judicial service within the Unified Court System. R. 30; 47. On or about the same date, Justice Murphy 2 The new policy applies only to Justices whose pensions are based- to any extent- on prior judicial service. It does not apply to Justices who are receiving retirement benefits as a result of public service other than judicial service, to Justices who have private or corporate pensions, or to any other employee of the Unified Court System, all of whom may collect retirement benefits from the New York State and Local Retirement System while being employed by the Unified Court System and, if they are under age 65, upon receiving a waiver pursuant to Retirement and Social Security Law § 211. The total number of Justices currently or prospectively within the ambit of the policy is not known. 13 6007427v.l requested, in correspondence to all members of the Administrative Board, that they clarify that the new policy does not apply retroactively to Justices who were already receiving retirement benefits at the time the policy was adopted. R. 62-63. On or about December 9, 2013, the Administrative Board denied both requests. R. 30; 47. The requirement that Justices Loehr, Murphy and Miller suspend their retirement benefits in order to be certificated is severely detrimental to each of them. Indeed, the Supreme Court acknowledged that "any 'suspension' of their pension to comply with the certification policy would have adverse financial consequences to the petitioners beyond such 'suspension."' R.6-7. Justice Loehr would forfeit up to six years of retirement benefits in the amount of $66,573 per year. R. 48. In addition, the death benefit that his wife will receive from his employment as a Justice of the Supreme Court is substantially less than the retirement benefits she would receive. R. 48. His potential loss is over $400,000. R. 49-50. Justice Murphy would forfeit up to four years of retirement benefits in the amount of $91,309 per year and, potentially, his wife's annual benefit for life. R. 57-58. His potential loss is over $500,000, as his pension was fixed at the earlier salary which had been frozen for 12 years. R. 56-59. Justice Miller would forfeit up to six years of pension benefits at $89,000 per year and, potentially, his wife's benefits for 14 6007427v.l life. R. 75-76. His potential losses would exceed $400,000. R. 76-77. The Justices' affidavits address these issues in more detail. R. 42-50; 51-65; 66- 77. Because of these dire, unexpected and unconstitutional consequences, Justices Loehr, Murphy and Miller commenced this action in December 2013, demanding judgment (i) declaring pursuant to CPLR 3001 that the policy adopted by the defendant Administrative Board of the Courts of the State of New York prohibiting a retired Justice of the Supreme Court who is receiving a pension from the State of New York based to any extent on judicial service in the Unified Court System from being certified for service as a retired Justice pursuant to Article VI, § 25(b) of the New York State Constitution and Judiciary Law § 115 is illegal and unconstitutional; (ii) pursuant to CPLR article 78 vacating the Administrative Board's refusal on that basis to certify them for continued service and directing the Administrative Board to grant their applications for certification unconditionally; and (iii) awarding Justices Loehr, Murphy and Miller incidental monetary relief in any amount they lose in retirement benefits by reason of the unnecessary suspension of their retirement benefits, together with interest, attorneys' fees and litigation expenses. R. 18-40. By agreement 15 6007427v.l of the parties, Justices Loehr, Murphy and Miller remain on the bench pending the ultimate resolution of this action. By order dated May 5, 2014, the Supreme Court, Albany County (Gerald W. Connolly, A.J.S.C.), dismissed the petition-complaint. R. 4-15. Justices Loehr, Murphy and Miller appealed. The Appellate Division, Third Department, unanimously reversed, holding that the Administrative Board's new policy violated Retirement and Social Security Law § 212, Judiciary Law § 115(3) and Article V, § 7 of the New York Constitution. R. 375-79; Loehr v. Administrative Bd. of the Court of the State of New York, 130 A.D.3d 89, 91 (3d Dep't 2015). Specifically, the Appellate Division held that the Administrative Board's argument that employers were permitted to require employees to waive their rights under§ 212 was wholly unsupported by the text of the statute and contrary to its legislative purpose: The language of Retirement and Social Security Law § 212 explicitly allows New York public employees - including Justices of the Supreme Court- to retire in place and continue to work while collecting their state pension. Respondent's argument that section 212 (1) implicitly permits state employers and-and respondent here-to require employees to bargain away their legal right to the continued receipt of retirement benefits is unpersuasive. On the contrary, the plain language of section 212 (1) grants this right to public employees without mention of employers or an employer's discretion to condition recertification upon suspension of a statutory right (compare Retirement and Social Security Law § 211 [2] [a]). 16 6007427v.l . . . Specifically, respondent's contention that employers are allowed to require suspension of pension rights is irreconcilable with the legislative goal in amending the statute to make it "easier for pensioners to supplement their income." /d. at 91-92 (citation omitted). The Appellate Division also held that the policy was not rationally related to the statutory criteria for certification, 130 A.D.3d at 93, and that the new policy turns certificated Justices into a lesser class of Justices with diminished rights compared to non-certificated Justices in violation of Judiciary Law § 115(3)'s prescription that "a certificated judge is 'a justice of the [S]upreme [C]ourt in the district in which he [or she] resides' for purposes that include 'salary' and 'rights,"' id. at 92. The Appellate Division rejected the Administrative Board's reliance on Marro v. Bartlett, finding the case "easily distinguishable" given that it concerned an individual certification determination as opposed to a statewide policy directive. /d. at 93. Moreover, held the court, Marro did not authorize the Administrative Board "to change the requirements for certification." /d. The Appellate Division nevertheless held, relying on this Court's definition in Marro of the "necessity" prong of the certification criteria, that the Administrative Board's new policy was irrational: [T]his Court cannot discern a rational argument for the proposition that a Supreme Court Justice's pension-taking falls under the category of necessity when determining a justice's 17 6007427v.l !d. eligibility for certification. Specifically, the Court of Appeals has explained that certification is based upon necessity and physical and mental fitness and defines necessity as "a need for additional judicial manpower and [an] individual applicant [who] can meet this need at least in part" (Matter of Marro v. Bartlett, 46 N.Y.2d at 680). Respondent's reasoning that so called "double-dipping" within the court system created a problem with the public and other branches of government does not equate to either of the prongs in the two-prong test for necessity. The Administrative Board appeals. ARGUMENT The order of the Appellate Division should be affirmed. Reversal would allow a policy which violates state and federal law, including Retirement and Social Security Law § 212, 1 udiciary Law § 115, and Article V, §7 of the New York State Constitution, to stand. It would also expand the power of the Administrative Board far beyond that contemplated by Article VI,§ 25 of the New York State Constitution and Judiciary Law§ 115 and as delineated by this Court in Marro v. Bartlett. It would sanction the Administrative Board's complete disregard of this Court's constitutional authority to pass upon the statewide policies of the Unified Court System. And it would encourage the continued politicization of the certification process. 18 6007427v.l I The Administrative Board's new policy and its action here violate Retirement and Social Security Law§ 212, Judiciary Law§ 115(3) and Article V, § 7 of the New York State Constitution, which are statutory and constitutional provisions unrelated to the certification process As the Appellate Division correctly held, the Administrative Board's new policy requiring a retired Justice to suspend and forfeit his or her retirement benefits as a condition of certification violates Retirement and Social Security Law § 212, Judiciary Law § 115(3) and Article V, § 7 of the New York Constitution. Marro did not address these issues. Contrary to the Administrative Board's argument, the "discretion" of the Administrative Board that this Court found to be dispositive in Marro is not even applicable here as Petitioners' claims fall within the explicit exception to the discretion identified in that case: the Administrative Board may not adopt criteria which constitute "a violation of constitutional or statutory prescription unrelated to the certification process itself." 46 N.Y.2d at 677. A. The Administrative Board's new policy violates the explicit text and statutory purpose of Retirement and Social Security Law § 212 and Judiciary Law§ 115(3). Retirement and Social Security Law § 212 provides that "any retired person may continue as retired and, without loss, suspension or diminution of his or her retirement allowance, earn in a position or positions in public service in any calendar year an earning limitation not exceeding" the amount 19 6007427v.l set by the statute. The section goes on to provide that there is no earning limitation for a person who is 65 years of age or older. Id. Thus, unlike younger retirees, whose situation is governed by Retirement and Social Security Law § 211, Justices Loehr, Murphy, and Miller can receive both their retirement benefits for their past work, and their salary for their current work, because they are each over the age of 70. R. 25; 26; 28; 45; 54; 69.3 The Retirement and Social Security Law thus confers an important retirement benefit on Justices of the Supreme Court who are seeking certification by giving them two options with respect to their retirement benefits. The first option, provided by Retirement and Social Security Law § 101, is the "default" option, under which the Justice may, upon certification, place his or her pension in "accrual" status, suspending payment of retirement benefits in return for the annual accrual of additional retirement benefits. Retirement and Social Security Law § 212, which was adopted later, and applies "[n]otwithstanding the provisions of section one hundred one," provides an alternative option, allowing the Justice to freeze his or her pension and begin collecting retirement benefits, while forfeiting the accrual of additional retirement benefits. Justices Loehr, Murphy and Miller each 3 Civil Service Law § 150, on which the Administrative Board also relies, is not relevant here because, as a provision which diminishes retirement benefits, it applies only to state employees who have joined the retirement system after its effective date of July 26, 1995. Petitioners all joined the retirement system before that. 20 6007427v.l elected the second option. The new policy requiring them to forfeit that right and proceed only under Retirement and Social Security Law § 101 is in direct conflict with the explicit text and purpose of§ 212. For this reason, it is disingenuous for the Administrative Board to argue that the new policy does not cause a forfeiture of any retirement benefits. Justices subject to the new policy lose an important retirement option and hundreds of thousands of dollars. This is what the United States Supreme Court referred to in a different context as having "no choice, except the choice between the rock and the whirlpool - an option to forego a privilege which may be vital to [a person's] livelihood or submit to a requirement which may constitute an intolerable burden." Such a choice, as the Court noted, cannot stand because it leaves "constitutional guaranties, so carefully safeguarded against direct assault, [] open to destruction by the indirect, but no less effective, process of requiring a surrender, which, though in form voluntary, in fact lacks none of the elements of compulsion." Frost v. R.R. Comm'n of State of Cal., 271 U.S. 583,593 (1926). B. State policy, as established by the Legislature, permits certificated Justices to receive both their retirement benefits and their salaries. In addition to violating the express language of Retirement and Social Security Law § 212, the Administrative Board's new policy also violates its 21 6007427v.l statutory purpose. The legislative history of Retirement and Social Security Law § 212 establishes that the State does not have an absolute policy against employing persons receiving state retirement benefits which would justify depriving Petitioners of their protected pension rights, as the Administrative Board claims. See Appellant's Br. at 19. Rather, the Legislature has already specifically considered the possibility that retirees over the age of 65 may receive both state retirement benefits and a state salary, as Retirement and Social Security Law § 212 provides, and has dismissed any negative impact of that possibility as minimal and outweighed by the benefits of the provision. Thus, the Legislature has rejected the "public policy" on which the Administrative Board based its new policy. In 2002, the Legislature amended Retirement and Social Security Law § 212 to reduce from 70 to 65 the age at which a retiree could earn unlimited income from public employment in addition to receiving pension benefits. 2002 Sess. Law News of N.Y. Ch. 474 (A/4190-A) (McKinney's). The Budget Report accompanying the bill concluded that increasing the exception to include those aged 65 to 69 years "would result in only negligible additional costs." Assembly Bill 4190A, chapter 474, Laws of 2002 Budget Report on Bills. Moreover, the Report explicitly considered the argument in opposition to the amendment, namely that "unpopular" 22 6007427v.l instances of "double-dipping" would increase. !d. The Report concluded "[ w ]hile such 'double-dipping' may be a concern to some, exposure to abuses should be minimal within the 65-69 demographic." !d. Ultimately any potential concerns were outweighed by the anticipated benefits of the bill: "provid[ing] additional incentive for retirees aged 65 to 69 to return to work" thereby fulfilling the "high demand for the skills and expertise of public retirees in the job market." Id. Indeed, the Division of Budget, Office of the State Comptroller, Governor's Office of Employee Relations, and the Department of Civil Service all reported that they had "no objection" to the 2002 amendment, despite the potential expansion of the pool of retirees who would receive state retirement benefits and salary at the same time. Assembly Bill4190A, chapter 474, Laws of 2002, S3365 at 3-8. Thus, in enacting and amending Retirement and Social Security Law § 212 to exempt retirees over age 65 from the general proscription on simultaneously receiving salary and retirement benefits, the Legislature has already considered and rejected the claimed State policy against "double- dipping" on which the Administrative Board purportedly relies to refuse certification to Justices Loehr, Murphy and Miller. "Double-dipping" addresses early retirement by younger employees. Individuals over age 65 are a group of retirees that the Legislature specifically intended to exclude 23 6007427v.l from the ban. The Administrative Board's new policy thus conflicts with both the letter and intent of Retirement and Social Security Law § 212. To the extent that there is a state policy against "double-dipping," it is not a blanket policy that applies in all circumstances. Instead, the Legislature has carved out specific, considered exceptions based on a weighing of the costs and benefits of the employment of retirees, and this Court has recognized that the "double-dipping" policy is not unconditional and enforced the exceptions. The Administrative Board's attempt to ignore the State's nuanced approach to simultaneous receipt of salary and pension benefits by certain groups and demonize all those who "double-dip" is exemplified by its reliance on Baker v. Regan, 68 N.Y.2d 335, 341 (1986) for the existence of a general proscription on "double-dipping," Appellant's Br. at 19, arguing that "as Baker made clear, double-dipping, even where legal, is prone to negative connotations of abuse of the public fisc," id. at 24. But, in Baker, this Court not only acknowledged that the Legislature had created exceptions to the "general proscription" prohibiting receipt of salary and pension benefits at the same time, it also ordered that a judge who was over 70 should continue to receive his pension allowance as well as his judicial salary, in accordance with Retirement and Social Security Law § 212. See also Hagler v. 24 6007427v.l Paterson, 30 Misc.3d 684, 685 (Sup. Ct. Albany Co., 2010) (observing that Retirement and Social Security Law § 212 provides for exceptions to the "general" rule that "when a member of the retirement system returns to public service, the member's pension benefits are suspended"). Indeed, there are over 2,600 active state employees receiving both a salary and retirement benefits pursuant to these exceptions. R. 144. Retirement and Social Security Law § 212, which permits retirees over age 65 to earn an unlimited public salary while continuing to receive pension benefits, is one of those exceptions created by the Legislature. The Administrative Board cites to no statute or case providing the Board with the authority to abrogate Petitioners' rights under § 212. C. Retirement and Social Security Law § 212 expressly supersedes Retirement and Social Security Law§ lOl(c). The new argument which the Administrative Board hints at in footnote 7 at page 20 of its brief, that Retirement and Social Security Law § 101(c) and Civil Service Law§ 150 "mandates the suspension of applicants' pensions as a condition of certification as a matter of law," is both unpreserved and incorrect. Bingham v. New York City Transit Auth., 99 N.Y.2d 355, 359 (2003) ("[T]his Court with rare exception does not review questions raised for the first time on appeal. Unlike the Appellate Division, we lack jurisdiction to review unpreserved issues in the interest of justice."); 25 6007427v.l Brady v. Williams Capital Grp., L.P., 64 A.D.3d 127, 148 (1st Dep't 2009) (argument raised for first time in footnote of reply brief not properly before the court); People v. McDaniel, 295 A.D.2d 371, 371 (2d Dep't 2002) (refusing to consider issues raised only in footnotes). Indeed, the Administrative Board's citation of Retirement and Social Security Law § 101(c), and its disagreement with "the Third Department's unsubstantiated observation that Section 101 'has been effectively superseded by Retirement and Social Security Law § 212"' is astounding. Appellant's Br. at 20 n.7. The Board continues to embrace the Unified Court System's long-held misconception of the legislative fact that § 212 was enacted after § 101 and that its opening clause expressly supersedes the provisions of § 101 to the extent they are in conflict. Retirement and Social Security Law § 212(1) ("Notwithstanding the provisions of section one hundred one, ... any retired person may continue as retired and, without loss, suspension or diminution of his or her retirement allowance, earn in a position or positions in public service in any calendar year an amount not exceeding the amount set forth in the table in subdivision two of this section ... ") (emphasis added); R. 377 ("section 101 has been effectively superseded by Retirement and Social Security Law § 212"). This was doubtless the Legislature's acknowledgement that it would be basically unfair to deny to Supreme Court 26 6007427v.l Justices a pension right that it was conferring on all other state employees over age 65. Beyond the statutory language itself, which requires no interpretation or "substantiation," counsel to the state retirement fund, who work with these sections every day, offer employees the explanation that the only reason§ 101 was not entirely revoked is that it continues to govern the rights of those employees who elect to suspend payment of their pensions during re-employment. R. 156 q[5. D. The Administrative Board's new policy violates Judiciary Law§ 115(3) by establishing two classes of Supreme Court Justices with different benefits. The Administrative Board's new policy also conflicts with Judiciary Law § 115(3), which provides that certificated Justices have the same rights, in all respects, as Justices prior to certification. The Administrative Board's argument that it may defeat a Justice's right to retire under Retirement and Social Security Law § 212 by conditioning certification on the Justice's relinquishment of that right violates Judiciary Law § 115(3) because the policy, if effectuated through selective hiring, would create a class of certificated Justices with fewer rights than pre-certificated justices whom the Administrative Board may not prevent from availing themselves of the benefits of § 212. As a result, pursuant to Retirement and Social Security 27 6007427v.l Law § 212 and Judiciary Law § 115(3), Petitioners' retirement benefits cannot be affected by post-retirement state employment, and the Administrative Board's policy requiring them to suspend their retirement benefits as a condition of certification violates Retirement Law § 212 and Judiciary Law§ 115(3). E. By Denying Justices Loehr, Murphy and Miller their rights under Retirement and Social Security Law § 212, the Administrative Board impermissibly impaired their pension benefits in violation of Article V, § 7 of the New York State Constitution. The Administrative Board's new policy also violates the Impairment Clause of the New York Constitution, Article V, § 7. The Impairment Clause was intended to "fix the rights of the employee at the time he or she became a member of the retirement system." Civil Service Employees Ass 'n, Inc. v. Regan, 129 A.D.2d 378, 379 (3d Dep't 1987). It provides that "membership in any pension or retirement system of the state or of a civil division thereof shall be a contractual relationship, the benefits of which shall not be diminished or impaired." /d. It prevents the Legislature and any state employer from "unilaterally dirninish[ing]" benefits associated with the state retirement system. Village of Fairport v. Newman, 90 A.D.2d 293, 296 (4th Dep't 1982). 28 6007427v.l This Court has "defined, without limitation, the 'benefits of membership' in the New York State Retirement System" which are protected by Article V, § 7, "to include the funds in the system itself, the sources of those funds and the independent discretion of the Comptroller." McCall v. State of New York, 170 Misc.2d 644, 650-51 (Sup. Ct. Albany Co., 1995) (citing Sgaglione v. Levitt, 37 N.Y.2d 507 (1975) and McDermott v. Regan, 82 N.Y.2d 354 (1993)). "Included also within the constitutional shelter are those benefits regarded as conditional." Guzman v. New York City Employees Retirement Sys., 45 N.Y.2d 186, 191 (1978) (citing Donner v. New York City Employees' Retirement Sys., 33 N.Y.2d 413, 416 (1974)). What this means, and Donner establishes, is that changing the rules to require that Justices Loehr, Murphy and Miller suspend and forfeit their retirement option under Retirement and Social Security Law § 212 in order to be certificated, impairs those benefits within the meaning of the Impairment Clause and is, therefore, prohibited by that provision of the Constitution. The plaintiff in Donner became a member of the New York City Retirement System in 1941. At the time Donner entered the system, and at the time he retired and began receiving his retirement allowance in 1955, the Administrative Code provided that a member who had retired and had been 29 6007427v.l rece1vmg benefits, "had the right to agam become a member of the Retirement System if he were re-employed by the City of New York before attaining the age of 70 years." 33 N.Y.2d 413, 415. Donner re-entered City service when he was hired by the Law Department at the age of 67. He applied to re-enter the Retirement System, but his application was denied because the Administrative Code had been amended in the intervening years to reduce the cut-off age for reentry from 70 years to 65 years. Donner brought an Article 78 proceeding challenging the application of the amendment to him as a violation of the Impairment Clause. !d. at 416. This Court agreed. It held that the amendment impaired Donner's pension benefits in violation of the state constitution and rejected the defendant's contention- which mirrors the reasoning of the Supreme Court here - that there could be no impairment of pension rights because Donner was not entitled to be re-hired by the City: We find no merit in the Retirement System's argument that the amendment in question affected no protected benefit of Donner's since he had no right requiring the city to re-employ him. Prior to the passage of the complained of amendment, Donner could have rejoined the Retirement System if he were rehired by the city. This opportunity to re-enter the Retirement System, while conditional upon being rehired by the city, was nevertheless a retirement benefit. The city was not obliged to re-employ Donner, but having done so, the conditional aspect of the benefit was satisfied and Donner had a right to be re- enrolled as a member. This right is protected by the 30 6007427v.l Constitution and cannot be taken from him by the city's unilateral action. 33 N.Y.2d at 416 (emphasis added). The right of retirees over the age of 65 to receive both their public salaries and retirement benefits pursuant to Retirement and Social Security Law § 212 is similarly conditional on obtaining subsequent state employment, here, certification under Judiciary Law § 115. But, like the right to reenter the retirement system at issue in Donner, though conditional, the right is nevertheless constitutionally protected. Here, systematic refusal to certificate without forfeiture of the retirement option under Retirement and Social Security Law § 212 would violate Judiciary Law § 115(3) by creating a class of Supreme Court Justices with fewer rights than they had before certification. Thus, while there is no right to automatic certification under Judiciary Law § 115 upon reaching age 70 (and Petitioners have never claimed such a right), Justices Loehr, Murphy and Miller were entitled to have their applications for certification considered without regard to whether they are currently receiving retirement benefits. And when the Administrative Board determined that they satisfied the statutory criteria - which the Board did when it offered them conditional certification, R. 47; 55-56, 71, 114-16, - Justices Loehr, Murphy and Miller were entitled to be certified free from the 31 6007427v.l demand that they suspend their retirement benefits. Consequently, the Administrative Board's argument that there was no violation of Retirement and Social Security Law § 212 because § 212 "does not create a right to remain in public service," Appellant's Br. at 25, is based on the very reasoning that this Court rejected in Donner. The Administrative Board's argument that there is no violation of Retirement and Social Security Law § 212 because rights under § 212 may be "voluntarily waived" is wholly unsupported. Appellant's Br. at 24-25. First, the new policy forcing a waiver can hardly be called voluntary. Even more, to waive causes the termination of the justice's chambers' staff. See Judiciary Law § 36; R. 56
