In the Matter of The Council of the City of New York, Respondent,v.The Department of Homeless Services of the City of New York, et al., Appellants.BriefN.Y.October 8, 2013To be Argued by: JEFFREY P. METZLER (Time Requested: 15 Minutes) New York County Clerk’s Index No. 403154/11 Court of Appeals No. APL-2013-00140 Court of Appeals of the State of New York In the Matter of the Application of THE COUNCIL OF THE CITY OF NEW YORK, Petitioner-Respondent, For a Judgment Pursuant to CPLR Article 78 – against – THE DEPARTMENT OF HOMELESS SERVICES OF THE CITY OF NEW YORK and SETH DIAMOND, Commissioner for the Department of Homeless Services of the City of New York, Respondents-Appellants. BRIEF FOR PETITIONER-RESPONDENT Of Counsel: JEFFREY P. METZLER ELIZABETH R. FINE GENERAL COUNSEL Attorney for Petitioner-Respondent 250 Broadway, 15th New York, New York 10007 Floor Tel.: (212) 788-9131 Fax: (212) 513-0701 Date Completed: July 31, 2013 i TABLE OF CONTENTS Page TABLE OF AUTHORITIES .......................................................................................................... ii PRELIMINARY STATEMENT .................................................................................................... 1 QUESTIONS PRESENTED ........................................................................................................... 3 STATEMENT OF FACTS ............................................................................................................. 3 A. Background ...................................................................................................................... 3 B. Issuance of the Procedure ................................................................................................. 5 C. The Procedure .................................................................................................................. 6 PROCEDURAL HISTORY............................................................................................................ 9 STATUTORY FRAMEWORK .................................................................................................... 13 ARGUMENT ................................................................................................................................ 17 POINT I – THE PROCEDURE IS VOID BECAUSE IT IS A RULE THAT WAS NOT PROMULGATED IN ACCORDANCE WITH CAPA ............................................................ 17 A. The Procedure Is A Rule Within the Plain Meaning of CAPA ...................................... 17 B. The Exercise of Discretion in Making Individual Determinations Does Not Exempt the Procedure from the Rulemaking Process Because It Is Applicable to All Intake Facilities and All Single Adults Seeking Shelter ............ 20 C. The Procedure Does Not Give DHS the Discretion It Claims to Have When Making Individual Determinations ............................................................ 31 POINT II – CAPA’S EXCEPTION FOR A STATEMENT WHICH IN ITSELF HAS NO LEGAL EFFECT BUT IS MERELY EXPLANATORY DOES NOT APPLY ...................... 34 A. The Procedure Would Have a Profound Effect on New Yorkers Seeking Shelter ........ 34 B. State Regulations and Directives Do Not Require DHS to Implement the Procedure .. 41 CONCLUSION ............................................................................................................................. 44 ii TABLE OF AUTHORITIES Page Cases 439 E. 88 Owners Corp., Matter of v. Tax Comm’n, 307 A.D.2d 203 (1st Dep’t 2003) ....................................................................... 33 1700 York Assocs. v. Kaskel, 182 Misc. 2d 586 (Civ. Ct. N.Y. County 1999) ........................................... 16, 35 Abbott, Matter of v. Kelly, 145 A.D.2d 921 (4th Dep’t 1988) ......................................................... 24, 25 n.11 Alca Indus., Matter of v. Delaney, 92 N.Y.2d 775 (1999) ..................................................................................passim Ali v. Fed. Bureau of Prisons, 552 U.S. 214 (2012)……………………………………………………….19 n.9 Asmussen v. Comm’r, New Hampshire Dep’t of Safety, 145 N.H. 578 (2000) ................................................................................... 26 n.12 Bizarre, Inc., Matter of v. State Liquor Auth., 29 A.D.2d 500 (1st Dep’t 1968) ......................................................................... 25 Carondelet Health Servs., Inc. v. Arizona Health Care Cost Containment Sys. Admin., 182 Ariz. 221 (1994) ...................... 26 n.12 Chase Nat. Bank of New York , Matter of v. Guardian Realties, Inc. 283 N.Y. 350 (1940)………………………………………………………19 n.9 Ciotoli, Matter of v. Goord, 256 A.D.2d 1192 (4th Dep’t 1998)………………………………......29, 30 n.14 Cordero, Matter of v. Corbisiero, 80 N.Y.2d 771 (1992) ......................................................................................... 23 iii Cubas v. Martinez, 8 N.Y.3d 611 (2007) ............................................................................... 39, 40, 41 DeBonis v. Corbisiero, 178 A.D.2d 183 (1st Dep’t 1994)……………………………………...…39 n.20 H.D. Services, LLC, Matter of v. New York State Comptroller, 51 A.D.3d 1236 (3d Dep’t 2008) ........................................................................ 34 Home Care Ass’n of New York State, Inc., Matter of v. Dowling, 218 A.D.2d 126 (3d Dep’t 1996) ......................................................... 24, 38 n. 19 J.D. Posillico, Inc., Matter of v. Dep’t of Transp., 160 A.D.2d 1113 (3d Dep’t 1990) ................................................................ 21, 24 Jones, Matter of v. Smith, 64 N.Y.2d 1003 (1985) ................................................................................passim Lamie v. U.S. Trustee, 540 U.S. 526 (2004)……………………………………………………….19 n.9 Lue-Shing, Matter of v. Travis, 12 A.D.3d 802 (3d Dep’t 2004) .......................................................................... 29 Majewski v. Broadalbin-Perth Cent. School Dist., 91 N.Y.2d 577 (1998)…………………………………………………………37 Martin v. Dep’t of Corr., 424 Mich. 553 (1986) ................................................................................. 25 n.12 Medical Soc’y, Matter of v. Serio, 100 N.Y.2d 854 (2003) ................................................................................. 28, 30 Metromedia, Inc. v. Director, Div. of Taxation, 97 N.J. 313 (1984) ...................................................................................... 26 n.12 Nat’l Ass’n of Indep. Insurers v. State of New York, 207 A.D.2d 191 (2d Dep’t 1994)……………………………………..39-40 n.20 iv New York City Transit Auth., Matter of v. New York State Dep’t of Labor, 88 N.Y.2d 225 (1996) .......................................... 28, 29, 30 New York State Coalition of Public Employers, Matter of v. New York State Dep’t of Labor, 60 N.Y.2d 789 (1983) .............................. 38, 39 People v. Cull, 10 N.Y.2d 123 (1961) ............................................................................. 16, 17, 22 People ex rel. Padilla v. Rodriguez, 145 A.D.2d 922 (3d Dep’t 1988) .......................................................... 25, 25 n.11 Pickus v. United States Bd. of Parole, 507 F.2d 1107 (D.C. Cir. 1974) .......................................................................... 25 Roman Catholic Diocese, Matter of v. New York State Dep’t of Health, 66 N.Y.2d 948 (1985) ..................................................... 17 Roman Catholic Diocese, Matter of v. New York State Dep’t of Health, 109 A.D.2d 140 (3d Dep’t 1985) ....................... 20, 29, 30 Schwartfigure, Matter of v. Hartnett, 83 N.Y.2d 296 (1994) ...............................................................18 n.8, 23, 25 n.11 Sound Distributing Corp. v. New York State Liquor Authority, 144 Misc. 2d 1 (Sup. Ct. Bronx County 1989) ................................................... 25 Sun Ray Drive-In Dairy, Inc. v. Oregon Liquor Control Comm’n, 16 Or. App. 63 (1973) ................................................................................. 26 n.12 Trustees of the Masonic Hall, Matter of v. Axelrod, 174 A.D.2d 199 (1992) ....................................................................................... 30 Yaretsky v. Blum, 456 F. Supp. 653 (S.D.N.Y. 1978) ..................................................................... 25 v Statutes and Regulations N.Y.C.R.R., Tit. 10, Ch. 2, Part 86 .......................................................................... 30 7 N.Y.C.R.R. §§ 252.3, 252.5, 252.7, 253.7, 253.9 ......................................... 22 n.10 18 N.Y.C.R.R. § 352.35 ....................................................................... 12 n.6, 40 n.20 N.Y. S.A.P.A. § 102 ........................................................................................... 18 n.8 N.Y. City Charter §§ 610-614 ............................................................................ 14 n.7 N.Y. City Charter § 1041(2) .............................................................................. 14 n.7 N.Y. City Charter § 1041(5) .............................................................................passim N.Y. City Charter § 1043 ..................................................................................passim N.Y. Laws of 1997, ch. 436, § 122(a), (f) ....................................................... 42 n.21 1 R.C.N.Y. § 15-04(d)(6) ......................................................................................... 26 3 R.C.N.Y. § 113-01(d)(6) ....................................................................................... 26 15 R.C.N.Y. § 16-15(a) ............................................................................................ 26 15 R.C.N.Y. § 19-05(b)(2) ....................................................................................... 27 16 R.C.N.Y. § 3-02(m) ............................................................................................ 27 38 R.C.N.Y. § 13-01(f) ...................................................................................... 27-28 66 R.C.N.Y. § 11-82(e)(iii) ...................................................................................... 27 67 R.C.N.Y. § 6-33(b)(3)(iii) ................................................................................... 27 vi Other Authorities Hearing of Committee on General Welfare, New York City Council (Nov. 9, 2011) ........................................... 4 n.4, 35 n.15 Mayor’s Management Report (2012)............................................................... 35 n.16 1 McKinney’s Statutes § 98 ..................................................................................... 37 1 McKinney’s Statutes § 240 ........................................................................... 36 n.17 Notice of Proposed Rule: Air Emissions From Surface Coating Facilities, 2012-44 N.Y. St. Reg. 33 (Oct. 31, 2012) ...................................................................................... 37-38 n.19 Notice of Proposed Rule: Quality Assurance Requirements for Medical Use of Radioactive Materials and Radiation Therapy, 2012-40 N.Y. St. Reg. 20 (Oct. 3, 2012) ............. 37-38 n.19 N.Y. Dep’t of Social Services, Preventing Homelessness and Providing Assistance to Homeless Persons, 94 ADM-20 (Dec. 29, 1994) ................... 12 n.6 N.Y. Dep’t of Social Services, Responsibilities of Homeless Individuals and Families, 96 ADM-20 (Dec. 27, 1996) .................................................. 12 n.6 2 N.Y. Jur. 2d Administrative Law § 12 (2011) .............................................. 25 n.12 2 Report of the New York City Charter Revision Commission, December 1986- November 1988…...………….15, 18 n.8, 19 n.9, 32, 35 1 PRELIMINARY STATEMENT For at least thirty years, a single adult in New York City has been able to obtain temporary housing assistance (“THA”) from the New York City Department of Homeless Services (“DHS”) without having to prove that she is homeless, that she is indigent, or, indeed, even to show identification. On November 3, 2011, DHS issued a new policy, Procedure No. 12-400 (the “Procedure”), that would require all single adult intake facilities to conduct an investigation in which every single adult would have to prove by “clear and convincing evidence” that he or she had no other available housing or no means to obtain other housing. By DHS’s own estimates, between 10% to 60% of women and men who receive THA under DHS’s current policies could be denied shelter under the Procedure. The New York City Administrative Procedure Act (“CAPA”) requires that agency actions that would affect the public, like the Procedure, go through a rulemaking process designed to ensure accountability and openness in government. As this court has explained, “[r]ulemaking … sets standards that substantially alter, or in fact, can determine the result of future agency adjudication.”1 1 Matter of Alca Indus. v. Delaney, 92 N.Y.2d 775, 778 (1999) (internal quotation marks and citations omitted). The Procedure, which by its own terms “sets forth the standards by which” DHS will grant THA 2 (R. 149), clearly falls within this definition. DHS, however, argues that CAPA does not apply because DHS will purportedly exercise discretion when making individual determinations, pursuant to the Procedure, whether to provide shelter. This argument misses the forest for the trees, ignoring the distinction this Court has drawn “between ad hoc decision making based on individual facts and circumstances, and rulemaking, meaning any kind of legislative or quasi-legislative norm or prescription which establishes a pattern or course of conduct for the future.”2 DHS’s second argument – that the Procedure “has no legal effect, but is merely explanatory” – is not only oblivious to the profound effect the Procedure’s implementation would have on the women and men who would be denied shelter under the new policy, but misreads the plain language of CAPA, ignores DHS’s own practice of admitting all single adults over the last 15 years without requiring them to prove a lack of alternative housing or means, and misreads the statements An agency policy like the Procedure, which will be applied to all single adult intake facilities and all single adults seeking shelter, is subject to rulemaking even if an individual adjudication made pursuant to the policy involves the exercise of discretion. Moreover, the Procedure does not give DHS the discretion it claims to have when deciding whether to provide shelter to an individual woman or man. 2 Id. 3 and regulations issued by the New York State Office of Temporary and Disability Assistance, which do not require DHS to implement the Procedure. QUESTIONS PRESENTED 1. Is an agency policy that applies to all intake facilities and all single adults seeking shelter without regard to individual circumstances and that mandates certain results under certain circumstances a “rule” under the City Administrative Procedure Act? The Appellate Division answered in the affirmative. 2. Does CAPA’s exception for a statement “which in itself has no legal effect but is merely explanatory” apply to an agency policy that would result in the denial of shelter to hundreds, if not thousands, of women and men based on an intake assessment and standards that have never before been applied? The Appellate Division answered in the negative. STATEMENT OF FACTS A. Background The New York City Department of Homeless Services (“DHS”) has never required its intake facilities to investigate whether single adults seeking shelter have other available housing or the means to obtain other housing and has never 4 before denied temporary housing assistance (“THA”) to women or men on those bases. Nor have single adults seeking shelter in New York City ever been required to provide information or documentation regarding their prior housing arrangements or financial resources, let alone demonstrate by “clear and convincing” evidence that they are homeless. Indeed, DHS does not even require single adults to provide identification to qualify for shelter. (R. 50, 161-63, 278- 79, 349).3 DHS does not dispute these facts and estimates that the Procedure could affect up to 60% of the women and men seeking shelter 4 3 Citations to “R. __” are to the Record on Appeal. and that an estimated 10% of adults who currently receive shelter would be denied THA under its proposed Procedure No. 12-400 (the “Procedure”) (R. 189-90). DHS estimates that by denying shelter to these men and women, the agency would save approximately $4 million annually (R. 189-90). For the first time since the City entered into the landmark 1981 consent decree in Callahan v. Carey, Index. No. 42582/79 (Sup. Ct. New York County) (R. 64-73), vulnerable homeless women and men could be turned back onto the streets, where they may suffer serious harm and even death from exposure to the elements. 4 See Hearing of Committee on General Welfare, New York City Council (Nov. 9, 2011) at 86- 87 (available at http://legistar.council.nyc.gov/View.ashx?M=F&ID=1627093&GUID=C414E8A5-0BAB- 4BB7-A6BD-148A1F8F44D2); see also (R. 178). 5 B. Issuance of the Procedure In 2011, DHS requested that the New York State Office of Temporary and Disability Assistance (“OTDA”) approve its proposal to implement the Procedure (R. 51). On November 2, 2011, OTDA wrote to DHS stating: I am writing in response to your request for approval of the Department of Homeless Services’ (DHS) Single Adults Eligibility Procedure (the “Procedure”). The Procedure sets forth the standards by which DHS Single Adult Intake facilities (“DHS”) will determine whether individuals who apply for Temporary Housing Assistance (“THA”) are eligible for temporary emergency shelter. The Office of Temporary and Disability Assistance (“OTDA”) has reviewed the Procedure and determined that it is not inconsistent with State law or regulation. (R. 165). The following day, DHS issued the Procedure, with an effective date of November 14, 2011 (R. 167, 320). On November 9, 2011, OTDA wrote a second letter to DHS stating: Any suggestion that the Office of Temporary and Disability Assistance (“OTDA”) approved the New York City Department of Homeless Services (“DHS”) proposed shelter eligibility procedure for single homeless adults is inaccurate. OTDA has not commented on the substantive merits of the proposed change, but instead determined that the proposal was not inconsistent with State law. Moreover, this office has serious concerns that DHS failed to submit this proposal to the New York Supreme Court for review. For over thirty years, such a review process has been DHS’s practice when making a policy change relating to the Callahan Consent Decree. Given DHS’s failure to share this 6 policy with the Court, OTDA finds the November 14th implementation date – a mere ten days after the policy change was announced – to be completely unreasonable and is not supported by the State. (R. 169) (footnote omitted). DHS does not dispute that before it could implement the Procedure, it was required to obtain OTDA’s “technical approval.” (R. 187, 320). In testimony before the City Council, the Commissioner of DHS stated that the way “the relationship with the State works is the State issues regulations in the social services area, and localities are free to design their programs within the limits of those regulations. So we believe that because they determined that this program, this procedure that we’re going to implement, is consistent with the regulations, we could go forward.” (R. 182-83). There is also no dispute that in issuing the Procedure, DHS did not follow the procedures for rulemaking set forth in the City Administrative Procedure Act (“CAPA”). See DHS Br. at 16 (citing R. 236). C. The Procedure The stated purpose of the Procedure is to “set[] forth the standards by which [DHS] will determine whether individuals who apply for Temporary Housing Assistance (“THA”) are eligible for temporary emergency shelter….” (R. 149). This represents the first time in at least three decades that DHS has proposed to screen single adults seeking to enter shelter. Under the Procedure, all DHS intake 7 facilities would be required to grant or deny THA to men and women seeking shelter “based on an assessment of whether the applicant has a viable housing option where s/he can live even on a temporary basis and/or whether s/he possesses sufficient financial resources to secure such housing.” (R. 149). The Procedure sets forth in detail how DHS would conduct investigations, the criteria that DHS would apply, the application and determination process, and the opportunities for review that would be provided to women and men who are denied THA. (R. 149-159). With respect to investigations, the Procedure states that “DHS will investigate whether the applicant has other available housing or the means to obtain other housing.” (R. 150). “[A]ll applicants for THA” would be required to cooperate with the investigation “by providing all information and documentation necessary to determine the applicant’s eligibility for THA. If the applicant is unable to produce required documentation, s/he must explain the reason. Without a valid reason, failure to produce documentation constitutes a failure to cooperate.” (R. 151). A failure to cooperate will result in the denial of THA unless the individual suffers from “a verified mental or physical incapacity.” (R. 151-52). The Procedure also provides specific criteria that DHS will use to determine whether to grant or deny THA based on the housing options or financial resources that are purportedly available to the woman or man seeking shelter. For example, 8 DHS would investigate all residences where a woman or man resided in the year prior to applying for THA and could “propose additional actions, either on the part of the individual or primary tenant, to make the housing option suitable for the applicant to reside there on a temporary or permanent basis. Examples of such proposed actions include reconfiguring furniture or sleeping arrangements.” (R. 152). In addition, “[a] primary tenant’s claim, oral or written, that the applicant can no longer reside in the viable housing option is not, by itself, sufficient to establish that the housing is no longer available….” (R. 152). In other words, even if a friend or relative states that a woman or man seeking THA can no longer stay at the friend’s apartment, making it unavailable as a practical matter, DHS will nonetheless deem the apartment “available” and deny the applicant shelter unless the applicant provides some additional evidence in a form deemed acceptable under the Procedure. Similarly, adults seeking shelter who have a claim to formal tenancy rights at a given address will be found ineligible for THA, even if they are being evicted from their apartments and have returned their keys. Unless DHS determines that returning to the apartment would pose an “imminent threat to health or safety,” to the applicant, he or she “will be expected to retrieve their previously submitted keys from the landlord,” notwithstanding the practical impossibility of doing this, 9 and to “reside at that address until the event of a formal eviction actually occurs.” (R. 152-53). The “Application and Eligibility Determination Process” detailed in the Procedure includes an entirely new requirement that single adults seeking shelter “complete a Temporary Housing Application … and an Intake or Eligibility Determination Questionnaire (EDQ)…. This application will also contain a release that the applicant must sign authorizing DHS to disclose and collect medical and other personal information in conducting its eligibility investigation.” (R. 155). “Applicants who do not comply with the application process will be found ineligible based on non-cooperation, unless the reason for non-cooperation is mental or physical impairment as assessed by a qualified mental health or medical professional.” (R. 155). Finally, women and men seeking shelter who are denied THA may request a DHS conference or a State Fair Hearing before an administrative law judge. The Procedure states without qualification that “[a]pplicants who request a Fair Hearing will not be granted THA while the hearing is pending.” (R. 158). PROCEDURAL HISTORY On November 10, 2011, Plaintiffs in Callahan v. Carey, Index. No. 42582/79 (Sup. Ct. New York County) moved by order to show cause why, among 10 other things, the City defendants should not be (a) enjoined from implementing the procedures set forth in the Procedure pursuant to the Final Judgment by Consent in Callahan v. Carey; (b) enjoined from failing to provide shelter to any class member seeking shelter on the basis of the criteria set forth in the Procedure, unless and until the court modifies the consent decree; or (c) enjoined from implementing the Procedure unless and until they comply with CAPA. (R. 209- 11). On December 7, 2011, the Council brought this Article 78 proceeding against DHS and its Commissioner seeking an order (a) declaring the Procedure void because it was promulgated in violation of Chapter 45 of the New York City Charter, the City Administrative Procedure Act (“CAPA”), and (b) enjoining DHS from adopting, implementing or enforcing the Procedure pending compliance with CAPA. (R. 46-58). Supreme Court (Gische, J.) consolidated the two proceedings for consideration of the CAPA challenges (R. 13) and issued a Decision and Order on February 21, 2012, declaring the Procedure void and denying DHS’s cross-motion to dismiss the Council’s Article 78 Petition (R. 11-28). The court rejected DHS’s argument that the Procedure was not a rule because it provides for the exercise of discretion: A plain reading of the [Procedure] makes it clear that it mandates certain results under certain circumstances. Contrary 11 to the City’s arguments, while DHS has certain discretion in weighing factors before making a finding of eligibility for temporary housing, that discretion is not unfettered. There are a considerable number of mandated outcomes which leave DHS with no discretion about whether to deny temporary housing. While in some cases there are exceptions to outcomes, the exceptions do not … make a mandated outcome discretionary. (R. 20-21). The court also rejected DHS’s claim that the Procedure was not generally applicable, holding that it was generally applicable to all people who apply for THA and must be utilized at all DHS intake facilities. Its applicability is not a suggestion or a request, it is an across the board requirement. The fact that there may [be] elements of discretion in connection with determinations on individual applications does not negate the [Procedure’s] general applicability because the discretion does not involve simply disregarding the [Procedure.] (R. 21-22). Finally, the court rejected DHS’s argument that the Procedure falls within CAPA’s exception for a statement of “general policy, which in itself has no legal effect but is merely explanatory.”5 The application of the new eligibility process has the effect of determining who gets THA pursuant to the consent decree and existing law. Public Statements by DHS Commissioner Seth Diamond confirm that the [Procedure] is expected to reduce the The court noted that a “conclusion is easily drawn” that the Procedure, standing alone, “does have legal effect”: 5 N.Y. City Charter § 1041(5)(b)(ii). 12 number of people who were previously being accommodated by the shelter system by about 10% (and possibly more), at a projected cost reduction of $4,000,000 per year. (R. 23). While acknowledging consistencies between the Procedure and a state regulation and administrative directives6 Moreover, the court noted that the regulation and Administrative Directives relied on by DHS “have been in place for no less than 15 years. The procedures set out in the [Procedure], however, are new. If the [Procedure] is merely a strict interpretation of the State Regulation and State Administrative Directives, the procedures would have been in place for at least the last 15 years.” (R. 25). which address the provision of temporary housing assistance to homeless individuals, the court found that the Procedure cannot be merely explanatory of the regulation and directives because the Procedure “imposes many new obligations on applicants, with a concomitant creation and denial of substantive rights,” identifying several with specificity (R. 23-25). Finally, the court noted that “[t]he State does not join in the City’s arguments. Notwithstanding that the City sought State approval for the [Procedure], the State would only represent that the [Procedure] is not inconsistent 6 See 18 N.Y.C.R.R. § 352.35 (“State Regulation”); N.Y. Dep’t of Social Services, Preventing Homelessness and Providing Assistance to Homeless Persons, 94 ADM-20 (Dec. 29, 1994) (R. 75-122); N.Y. Dep’t of Social Services, Responsibilities of Homeless Individuals and Families, 96 ADM-20 (Dec. 27, 1996) (R. 124-147) (“State Administrative Directives”). 13 with state law.” (R. 25). Thus, “[t]he State’s position … does not support the City’s argument that the [Procedure] is a strict interpretation of State law….” (R. 26). On March 9, 2012, DHS submitted an Answer to the Council’s Article 78 petition, (R. 310-342) which was amended by Stipulation on March 14 (R. 349- 50). The parties agreed that the Answer did not introduce any issues that required further briefing and on March 14, 2012, the court issued a final order granting the Council’s Petition for the reasons stated in its Decision and Order dated February 21, 2012. (R. 9). DHS appealed to the Appellate Division, First Department. On February 14, 2013, the Appellate Division unanimously affirmed for the reasons stated in Justice Gische’s decision. (R. 355-356). On June 11, 2013, this Court granted DHS leave to appeal to the Court of Appeals. (R. 353). STATUTORY FRAMEWORK The City Administrative Procedure Act (“CAPA”), Chapter 45 of the New York City Charter (§§ 1041-1047), sets forth the process that every New York City 14 agency, including the Department of Homeless Services, must follow to adopt a rule.7 Charter § 1041(5) provides, in relevant part: “Rule” means the whole or part of any statement or communication of general applicability that (i) implements or applies law or policy, or (ii) prescribes the procedural requirements of an agency including an amendment, suspension, or repeal of any such statement or communication. a. “Rule” shall include, but not be limited to, any statement or communication which prescribes … (vii) standards for the granting of loans or other benefits. b. “Rule” shall not include any … (ii) form, instruction, or statement or communication of general policy, which in itself has no legal effect but is merely explanatory…. Charter § 1043 sets forth the requirements for rulemaking, which include notice to the public and the City Council, review by the Law Department, and opportunity for public comment. “No agency shall adopt a rule except pursuant” to § 1043. Charter § 1043(a). Moreover, rules that “implement particular mandates or standards set forth in newly enacted federal, state, or local laws, regulations or other requirements with only minor, if any, exercise of agency discretion in interpreting such mandates or standards,” are exempt from only the requirement that the law department review and comment, but are still subject to all other rulemaking 7 See Charter § 1041(2) (defining “agency” to include any officer or entity provided for in the Charter); id. §§ 610-614 (providing for Department of Homeless Services). 15 requirements, including notice and the opportunity for public comment. Id. § 1043(d)(4)(iv). The drafters of CAPA explained that, [t]he term “general applicability” encompasses any statement or communication that applies similarly to members of a class, regardless of the number of members in any such class. It includes statements which are limited in their application to certain geographic locations, if they are general in their application. The definition is intended to be construed broadly to accommodate the act’s basic objectives. Paragraph a of subdivision 5 sets forth several examples of statements which are specifically included in the definition of a rule, without limiting the scope of the basic general definition. Statements of the type listed in this paragraph, therefore, are to be treated as rules for purposes of CAPA, without need to resort to the language of the general definition. Since paragraph a is not a restriction on the breadth of the basic definition set forth in the opening statement of subdivision 5, any agency statement that would be a rule under the general definition is to be treated as such, whether or not it is similar in nature to any of the examples in paragraph a. Paragraph b of subdivision 5 lists statements which are not to be considered rules. They are therefore exempted from CAPA’s rulemaking procedures …. These exclusions apply primarily to an agency’s resource allocation, work force deployment, purely internal procedures and city employment- related matters…. While these exceptions are not intended to provide an escape for agencies from their rulemaking responsibilities, they are intended to illustrate that certain agency acts are not, in essence, rules…. 2 Report of the New York City Charter Revision Commission, December 1986- November 1988 (hereinafter “Report of Charter Revision Comm’n”) at 86-87 (emphasis added); see (R. 227) (“We have basically tried to include within this 16 new definition all of the standards for all of the various types of actions the city undertakes that affects the public, except the standards for the employment of personnel….”). In addition, [t]he requirement that the rules and regulations be filed serves to make them available to the public, to give the public notice thereof and provide a common and definite place where the exact content of such rules and regulations, including any changes, might be found [in] a central place where anyone may examine in that one place what the law or rule is that affects his particular interest. Matter of Jones v. Smith, 64 N.Y.2d 1003, 1006 (1985) (internal quotation marks, modifications and citations omitted); see People v. Cull, 10 N.Y.2d 123, 128 (1961) (“[W]e are trying to place the information in one place, where anybody who seeks it shall be able to find it.” (internal quotation marks omitted)); id. at 129 (“We should not strive to read exceptions into the section or construe it so as to permit the official in charge of the bureau, commission or authority to avoid the necessity of filing by attaching the label ‘order’ or ‘statement of policy’ or some other term to what is essentially a rule or regulation.”); 1700 York Assocs. v. Kaskel, 182 Misc. 2d 586, 594 (Civ. Ct. N.Y. County 1999) (“CAPA’s definition of a rule is to be construed broadly to accommodate the act’s basic objectives. CAPA’s fundamental objective is to inform and gather input from the public on the development and promulgation of the myriad of City agency rules that affect New 17 Yorkers: to provide accountability and openness.” (internal quotation marks and citations omitted)). ARGUMENT POINT I THE PROCEDURE IS VOID BECAUSE IT IS A RULE THAT WAS NOT PROMULGATED IN ACCORDANCE WITH CAPA A. The Procedure Is A Rule Within the Plain Meaning of CAPA CAPA defines a “rule,” as “the whole or part of any statement or communication of general applicability that (i) implements or applies law or policy, or (ii) prescribes the procedural requirements of an agency….” Charter § 1041(5). As this Court has explained, “[t]he term, ‘rule or regulation’ … embraces any kind of legislative or quasi-legislative norm or prescription which establishes a pattern or course of conduct for the future.” People v. Cull, 10 N.Y.2d 123, 126 (1961); accord Alca v. Delaney, 92 N.Y.2d 775, 778 (1999); Jones v. Smith, 64 N.Y.2d 1003, 1005-06 (1985); see Matter of Roman Catholic Diocese of Albany v. New York State Department of Health, 66 N.Y.2d 948, 951 (1985) (A rule is a “fixed, general principle to be applied by an administrative agency without regard to other facts and circumstances relevant to the regulatory 18 scheme.”).8 The Procedure clearly falls within CAPA’s definition of a rule. As Supreme Court correctly noted, and the Appellate Division agreed, the Procedure “is generally applicable to all people who apply for THA and must be utilized at all DHS intake facilities. Its applicability is not a suggestion or a request, it is an across the board requirement.” (R. 21). In other words, it establishes a “fixed, general principle to be applied” by all intake facilities, “without regard to other facts and circumstances,” which is to investigate and determine whether every single adult seeking shelter has other available housing or the means to obtain other housing (R. 149-50). DHS has not claimed, and the Procedure does not provide, that DHS personnel can elect to disregard the Procedure and not In addition, CAPA specifically provides that a rule “shall include, but not be limited to, any statement or communication which prescribes … standards for the granting of loans or other benefits.” Charter § 1041(5)(a)(vii) (emphasis added). 8 CAPA’s general definition of a “rule” is nearly identical to the definition used in the State Administrative Procedure Act (“SAPA”). See N.Y. State Admin. Proc. Act §102(2)(a). Additionally, this Court has “adopted for purposes of determining what constitutes a ‘rule’ under [SAPA] the criterion for constitutional filing purposes.” Schwartfigure v. Hartnett, 83 N.Y.2d 296, 301 (1994). CAPA’s list of what a rule “shall include,” see Charter § 1041(5)(a), which does not correspond to any provision in SAPA, “is not a restriction on the breadth of the basic definition.” 2 Report of Charter Rev’n Comm’n at 86-87. Therefore, CAPA’s definition of a rule is at least as inclusive as the definition under SAPA and the State constitution. See (R. 225) (describing CAPA as “all inclusive of what is in the state act.”). 19 investigate whether an woman or man seeking shelter has alternative housing options or means to obtain other housing. In addition, the Procedure “prescribes the procedural requirements,” Charter § 1041(5)(ii), that must be followed by all DHS single adult intake facilities and all single adult seeking shelter, and “prescribes … standards for the granting of … benefits.” Charter § 1041(5)(a)(vii). By its own terms, the Procedure “sets forth the standards by which [DHS] will determine whether individuals who apply for Temporary Housing Assistance (“THA”) are eligible for temporary emergency shelter ….” (R. 149 (emphasis added)). Given DHS’s concession that a “standard” is “the very definition of a rule,” see DHS Br. at 28, its failure to follow CAPA with respect to a policy that expressly “sets forth standards” is baffling.9 9 In its strained attempt to avoid the plain language of § 1041(5)(a)(vii), DHS seeks to rewrite CAPA by inserting the word ‘monetary’ in the phrase “other benefits.” DHS Br. at 26-27. Setting aside the fact that the Procedure falls squarely within CAPA’s general definition of a “rule,” see Charter § 1041(5), “it is not within the province of this court to rewrite the enactments of the Legislature.” In re Chase Nat. Bank of City of New York, 283 N.Y. 350, 360 (1940); see Lamie v U.S. Trustee, 540 US 526, 538 (2004) (rejecting argument that “would have us read an absent word into the statute.”). There is simply no support for DHS’s argument that the drafters of CAPA intended to limit the term “other benefits” to “other monetary benefits” merely by including one example of a “benefit.” Cf., e.g., Ali v. Federal Bureau of Prisons, 552 U.S. 214, 224-25 (2008) (declining to apply ejusdem generis in the absence of a list of specific items that share a “relevant common attribute.”). On the contrary, the Charter Commission made clear that CAPA’s definition of a rule “is intended to be construed broadly,” and “to include … all of the standards for all of the various types of actions the city undertakes that affects the public, except the standards for the employment of personnel….” 2 Report of the Charter Revision Comm’n at 86-87; (R. 227). 20 B. The Exercise of Discretion in Making Individual Determinations Does Not Exempt the Procedure from the Rulemaking Process Because It Is Applicable to All Intake Facilities and All Single Adults Seeking Shelter DHS argues that the Procedure is not a rule because it permits staff to exercise discretion when adjudicating whether to grant THA to an individual seeking shelter. See DHS Br. at 16-30. However, this argument misses the forest for the trees and ignores the fact that the Procedure itself applies to all intake facilities and all single adults seeking shelter, regardless of individual circumstances. As this Court has explained, there is a distinction between ad hoc decision making based on individual facts and circumstances, and rulemaking, meaning any kind of legislative or quasi-legislative norm or prescription which establishes a pattern or course of conduct for the future. … Choosing to take an action or write a contract based on individual circumstances is significantly different from implementing a standard or procedure that directs what action should be taken regardless of individual circumstances. Rulemaking, in other words, sets standards that substantially alter or, in fact, can determine the result of future agency adjudications. Matter of Alca Indus. v. Delaney, 92 N.Y.2d 775, 778 (1999) (internal quotation marks and citation omitted); see also Matter of Roman Catholic Diocese v. New York State Dep’t of Health, 109 A.D.2d 140, 146 (3d Dep’t 1985) (Levine, J., dissenting), rev’d 66 N.Y.2d 948 (1985) (adopting reasoning of Justice Levine) (distinguishing between agency “guidelines to aid in making ad hoc decisions in 21 performing their adjudicative function rather than their quasi-legislative, rulemaking role.”). Alca expressly contrasts the bid-withdrawal criteria at issue in that case with the contract bid standards that the Third Department held were subject to SAPA in J.D. Posillico, Inc. v. Dep’t of Transportation, 160 A.D.2d 1113 (3d Dep’t 1990). The difference was that the bid-withdrawal criteria in Alca applied only to the bidding for a particular contract and were not “required for any and all contract bidding,” whereas the standards at issue in J.D. Posillico, applied to all contract bidding. Alca, 92 N.Y.2d at 779. The fact that the standards in J.D. Posillico required the discretionary determination of whether bidders had demonstrated error by “clear and convincing proof” did not exempt the standards themselves from the rulemaking requirements. J.D. Posillico, 160 A.D.2d at 1114. DHS fails to recognize the distinction drawn in Alca, confusing the decision that DHS might take with regard to an individual adult seeking shelter (which in some cases could involve the exercise of discretion by agency staff) with the implementation of the Procedure itself, which directs all single adult intake facilities, without regard to individual circumstances, to investigate whether a woman or man seeking shelter has other available housing or the means to obtain housing, (R. 150), and requires “all applicants for THA … to cooperate with DHS’ eligibility process by providing all information and documentation necessary….” 22 (R. 151) (emphasis added); see (R. 21) (holding that the Procedure “is generally applicable to all people who apply for THA and must be utilized at all DHS intake facilities. Its applicability is not a suggestion or a request, it is an across the board requirement.”). Indeed, this Court’s decision in Matter of Jones v. Smith, 64 N.Y.2d 1003 (1985), is controlling on the question of whether a procedure that allows for the exercise of discretion in individual adjudications is nonetheless a “generally applicable” rule. The Jones court held that the “three-tier” prison disciplinary procedure was a “rule,” notwithstanding the fact that it provides for broad discretion in making individual disciplinary determinations.10 10 See, e.g., 7 N.Y.C.R.R. §§ 252.7 & 253.9 (giving superintendent unfettered discretion to reduce penalties); id. §§ 252.5 & 253.7 (giving violation officer discretion as to penalty to impose); id. § 252.3 (allowing violation officer to “allow any evidence necessary to aid in his decision”). Just as the Procedure is to be applied to all women and men seeking shelter, this Court found that the disciplinary rules “affect the entire prison population, that segment of the ‘general public’ over which the Department of Correctional Services exercises direct authority, and constitute a ‘kind of legislative or quasi-legislative norm or prescription which establishes a pattern or course of conduct for the future.’” Id. at 1005-06 (quoting People v. Cull, 10 N.Y.2d 123, 126 (1961)). 23 DHS has failed to explain how the Procedure could be any less of a rule than the highly discretionary prison disciplinary procedure that was held to be a rule in Jones. In the Appellate Division, DHS’s only response to Jones was that it was inapposite because the regulations were challenged under the constitutional requirement that rules be filed, rather than under SAPA. See DHS App. Div. Br. at 6. However, this is a distinction without a difference as this Court has “adopted for purposes of determining what constitutes a ‘rule’ under the State Administrative Procedure Act the criterion for constitutional filing purposes.” Schwartfigure v. Hartnett, 83 N.Y.2d 296, 301 (1994). Matter of Cordero v. Corbisiero, 80 N.Y.2d 771 (1992), is also instructive. In that case, this Court held that the “Saratoga policy” – which required that a suspension imposed for a racing infraction committed at the Saratoga racetrack be served at the Saratoga meet the following year – was a “rule’” under SAPA. Id. at 773. While the policy did “not purport to control the Board’s discretion as to what the suspension should be for a particular infraction,” it did “establish[] a mandatory procedure that pertains only to when and where a Saratoga suspension must be served in the event of an appeal.” Id. (citing regulations specifying penalties that can be imposed after prison disciplinary proceedings). Similarly in this case, notwithstanding DHS’s argument that the Procedure involves discretion in making a determination whether an adult seeking shelter 24 suffers from a mental or physical impairment, the Procedure establishes several mandatory procedures such as that non-impaired “[a]pplicants who do not comply with the application process will be found ineligible based on non-cooperation.” (R.155) (emphasis added); see (R. 158) (stating that in the event of a request for a Fair Hearing, applicants “will not be granted THA while the hearing is pending.”). The Appellate Division also has held repeatedly that agency communications that give wide discretion given to agency personnel in making individual adjudications are nonetheless rules within CAPA’s definition. See, e.g., Matter of Home Care Ass’n of New York State, Inc. v. Dowling, 218 A.D.2d 126, 127-28 (3d Dep’t 1996) (holding that agency memorandum directing agencies to conduct fiscal assessments was a “rule” notwithstanding substantial discretion involved in fiscal assessment); Matter of J.D. Posillico, Inc., 160 A.D.2d at 1113- 14 (holding that review procedures which required “clear and convincing proof” that a contract bidder made an unintentional mistake or that loss of profits would cause “irreparable financial damage” were subject to SAPA); Matter of Abbott v. Kelly, 145 A.D.2d 921, 922 (4th Dep’t 1988) (holding that standards for the conduct of parole rescission hearings were subject to SAPA notwithstanding broad discretion involved in making individual parole determinations); People ex rel. 25 Padilla v. Rodriguez, 145 A.D.2d 922 (3d Dep’t 1988) (same);11 Matter of Bizarre, Inc. v. State Liquor Auth., 29 A.D.2d 500, 502 (1st Dep’t 1968) (holding that establishment of licensing board with discretion to issue licenses constitutes rule); Sound Distributing Corp. v. New York State Liquor Authority, 144 Misc. 2d 1, 3-6 (Sup. Ct. Bronx County 1989) (holding that a resolution delegating authority to a licensing board “which apparently exercises … discretion to grant or deny such a permit,” “is obviously a ‘rule’ covered by [SAPA]”); Yaretsky v. Blum, 456 F. Supp. 653, 656 (S.D.N.Y. 1978) (holding that memoranda designed to assist health care facilities in determining the appropriate level of care placement for patients were “rules” notwithstanding the fact that the assessment of a patient’s condition required “the application of professional medical judgment.”); see also Pickus v. United States Bd. of Parole, 507 F.2d 1107, 1113 (D.C. Cir. 1974) (holding that federal parole guidelines were “rule” even though “they provide no formula for parole determination”).12 11 As with Jones v. Smith, DHS’s only response to Abbott and Padilla in the Appellate Division was that they were held to be rules for constitutional filing purposes, rather than under SAPA. As explained above, this is a distinction without a difference. See Schwartfigure, 83 N.Y.2d at 301. 12 Other jurisdictions that, like New York, based their administrative procedure acts on the Model SAPA, see 2 N.Y. Jur. 2d Administrative Law § 12 (2011), also consider policies that require complex or subjective decision making to be of “general applicability.” See, e.g., Carondelet Health Servs., Inc. v. Arizona Health Care Cost Containment Sys. Admin., 182 Ariz. 221 (1994) (agency’s method of determining hospital reimbursement amounts which involved “a complex calculation with subjective components” constituted a rule); Martin v. Dep’t of Corr., 424 Mich. 553, 564 (1986) (prison misconduct regulations were subject to state APA, 26 Moreover, there are dozens, if not hundreds of examples in the Rules of the City of New York (not to mention the N.Y.C.R.R.) in which a rule, duly promulgated under CAPA, permits an agency to exercise discretion, see, e.g., 1 R.C.N.Y. § 15-04(d)(6) (applicants for DOB residential hotel certification must provide identified materials and “[a]ny other documentation deemed relevant by the borough superintendent, in his or her discretion” (emphasis added)); 3 R.C.N.Y. § 113-01(d)(6) (“In lieu of a written examination for a certificate of fitness, the [Fire] Department, in its discretion, may accept educational credentials or professional licenses or certifications that demonstrate the applicant's knowledge of, or proficiency in, the subject matter for which the certificate is required.” (emphasis added)); 15 R.C.N.Y. § 16-15(a) (“NYCDEP may, in its discretion, temporarily limit or forbid access to any or all City Properties at any time and from notwithstanding agency argument that “management of prison discipline requires flexibility in response to changing circumstances and the inventiveness of inmates”); Sun Ray Drive-In Dairy, Inc. v. Oregon Liquor Control Comm’n, 16 Or. App. 63 (1973) (agency should have formally promulgated standards by which it denied grocery store licenses upon the statutory grounds that there are “sufficient licensed premises in the locality” or that license “is not demanded by public interest or convenience”); see also Asmussen v. Comm’r, New Hampshire Dep’t of Safety,145 N.H. 578, 592-93 (2000) (holding that agency instruction that hearing officers “ask questions of police officers to assist them in meeting their burden of proof” was a rule); Metromedia, Inc. v. Director, Div. of Taxation, 97 N.J. 313, 333 (1984) (“It does not follow that, because the [agency head] has statutory discretion, the manner in which this discretion is exercised is not governed by the standards that determine whether rule-making or adjudication must be followed in a given case.”). In Metromedia, the court emphasized the fundamental principle underlying the state APA: “When an agency’s determination alters the status quo, persons who are intended to be reached by the finding, and those who will be affected by its future application, should have the opportunity to be heard and to participate in the formulation of the ultimate determination.” Id. at 330. 27 time to time as may be necessary for Water Supply security, for public safety or resource protection” (emphasis added)); 15 R.C.N.Y. § 19-05(b)(2) (“The Commissioner, in his discretion, may issue wastewater discharge permits and may impose such terms and conditions [as] he deems necessary to protect the sewer system or the treatment processes thereof or to protect the public health or welfare.” (emphasis added)); 16 R.C.N.Y. § 3-02(m) (Department of Sanitation reserves the right to suspend permits to collect or dispose of certain solid waste “when the Commissioner, or his/her designee, in the exercise of his or her reasonable discretion, has reasonable cause to find that the holder of the permit has violated the terms” of any of applicable rules, regulations, or conditions (emphasis added)); 67 R.C.N.Y. § 6-33(b)(3)(iii) (Commissioner of the Department of Information Technology and Telecommunications “acting at his or her discretion, may award or deny such application [for a permit to install a public pay telephone] based upon a determination that such action is in the best interests of the City.” (emphasis added)), or consider the “totality of the circumstances” when making individual determinations, see, e.g., 66 R.C.N.Y. § 11-82(e)(iii) (SBS “will consider any relevant evidence” in assessing whether an applicant for certification as an Emerging Business Enterprise has experienced negative impact on business advancement because of social disadvantage and will determine whether “the totality of circumstances shows disadvantage” (emphasis added)); 38 R.C.N.Y. § 28 13-01(f) (disapproval of applicants for Special Patrolman designation “shall be based upon a review of the circumstances of previous arrests, employment records, mental history, reports of misconduct reflecting on character as referred to above, and any other pertinent records or information.” (emphasis added)).13 DHS’s reliance on this Court’s decisions in Matter of Medical Society v. Serio, 100 N.Y.2d 854 (2003), Matter of New York City Transit Authority v. New York State Department of Labor (“NYCTA”), 88 N.Y.2d 225, 229 (1996), and other lower court cases dealing with agency guidelines, see DHS Br. at 21-25, is misplaced because unlike the Procedure, the underlying policies in those cases had already gone through the rulemaking process. In Medical Society, 100 N.Y.2d at 867-68, the question was whether an agency requirement that insurers establish standards for reviewing late-filed claims constituted a rule. In concluding that the directive was not a rule, the Court noted that the “actual rule – that late filing must be excused upon a showing of ‘clear and 13 In the Appellate Division, DHS argued that the plethora of published rules that permit discretion is “not dispositive of whether such procedures must be promulgated as rules [because] City agencies sometimes take advantage of the rulemaking provisions of CAPA to publicize and solicit comments on matters which are not required, entirely or in part, to be rules,” and that “since DHS provided ample notice of the new procedure, it had no need, for purposes of publicity, to resort to CAPA.” DHS App. Div. Br. at 10. This argument strains credulity as agencies are obviously free to publicize and solicit comments on non-rules without “taking advantage” of the formal rulemaking process set forth in CAPA. And DHS’s claim of “ample notice” of the Procedure is laughable; DHS gave less than ten days’ notice and no opportunity for public comment on what would have been one of the most significant policy changes for homeless single adults in decades. Cf. (R. 169) (OTDA letter to DHS stating that OTDA “finds the November 14th implementation date – a mere ten days after the policy change was announced – to be completely unreasonable and is not supported by the State.”) 29 reasonable justification’ for the delay – has been duly promulgated … and adopted and published in compliance with the Constitution and State Administrative Procedure Act.” Id. Similarly, in Roman Catholic Diocese, the actual “rule” – the requirement that the agency determine the public need for the proposal – had been duly promulgated and adopted in compliance with the Constitution and SAPA. See Roman Catholic Diocese, 109 A.D.2d at 147 (citing 10 N.Y.C.R.R. 709.1, the regulation governing certificate of need determinations, which lists the factors that agency’s determination “shall include, but not be limited to”). And in NYCTA, the actual rules governing workplace health and safety were set forth in both the Code of Federal Regulations and the NYCRR after being duly promulgated and adopted in compliance with the New York Constitution and SAPA. See NYCTA, 88 N.Y.2d at 228, n* (noting that the Department of Labor adopted the federal safety and health standards at 12 N.Y.C.R.R. 800.3); see also Matter of Lue-Shing v. Travis, 12 A.D.3d 802, 803 (3d Dep’t 2004) (“[P]etitioner appeals, arguing only that the manner in which the Board applies the 9 N.Y.C.R.R. 8001.3 guidelines violates” the state constitutional requirement that a rule be filed with the secretary of state); Matter of Ciotoli v. Goord, 256 A.D.2d 1192, 1193 (4th Dep’t 1998) (holding that penalty guidelines for violations of duly promulgated prison disciplinary rules were not also subject to SAPA); Matter of 30 Trustees of the Masonic Hall v. Axelrod, 174 A.D.2d 199 (3d Dep’t 1992) (holding that detailed reimbursement procedure set forth in 10 N.Y.C.R.R., Ch. 2, Part 86, did not need to be amended to reflect guidelines regarding specific reimbursement criteria). Thus, the question was the manner in which the agency exercised its discretion pursuant to duly promulgated rules, not whether the rules themselves (which allowed for the exercise of discretion) were subject to the rulemaking procedure. In this case, by contrast, DHS is attempting to skip the crucial first step of promulgating any rule pursuant to CAPA that pertains to single adults in need of shelter. DHS has never before investigated whether single adults seeking shelter had other available housing or the means to obtain other housing and has never denied THA to single adults on those grounds. Thus, before DHS can argue that the Procedure is a guideline for making ad hoc adjudications that is exempt from CAPA, it must first promulgate an “actual rule” like the agencies did in Medical Society, Roman Catholic Diocese, and NYCTA.14 14 Compare, e.g., Jones v. Smith, 64 N.Y.2d 1003 (1985) (holding that prison disciplinary code was “rule”) with Ciotoli, 256 A.D.2d at 1193 (holding that penalty guidelines for violations of prison disciplinary code was not “rule”). In other words, the Procedure cannot be a “guideline[] to aid in making ad hoc decisions in performing [DHS’s] adjudicative function,” Roman Catholic, 109 A.D.2d at 146, because in the absence of the Procedure, DHS does not perform an adjudicative function with 31 respect to providing shelter to single adults; all single adults who present themselves at an intake facility seeking shelter are provided THA. C. The Procedure Does Not Give DHS the Discretion It Claims to Have When Making Individual Determinations Even if, arguendo, the inclusion of discretionary language exempted certain portions of the Procedure from CAPA’s rulemaking requirements, at least some parts of the Procedure would still constitute rules under CAPA because they “prescribe[] the procedural requirements of an agency,” Charter § 1041(5)(ii). See id. § 1041(5) (defining “rule” to mean “the whole or part of any statement…” (emphasis added)); see also Matter of Alca Indus. v. Delaney, 92 N.Y.2d 775, 778 (1999) (“Rulemaking … sets standards that substantially alter or, in fact, can determine the result of future agency adjudications.”). As Supreme Court found, A plain reading of the [Procedure] makes it clear that it mandates certain results under certain circumstances. Contrary to the City’s arguments, while DHS has certain discretion in weighing factors before making a finding of eligibility for temporary housing, that discretion is not unfettered. There are a considerable number of mandated outcomes which leave DHS with no discretion about whether to deny temporary housing. While in some cases there are exceptions to outcomes, the exceptions do not … make a mandated outcome discretionary. (R. 20). Specifically, “all applicants for THA are required to cooperate with DHS’s eligibility process by providing all information and documentation necessary,” 32 including “a release that the applicant must sign authorizing DHS to disclose and collect medical and other personal information….” (R. 151-52, 155) (emphasis added). The failure to cooperate mandates denial of shelter. Id. As Supreme Court recognized and the Appellate Division agreed, “[w]hile there is an exception if the applicant is suffering from a mental or physical impairment that affects his or her ability to cooperate, DHS is not free to simply disregard the mandated outcome where that applicant is not suffering from a mental or physical impairment.” (R. 21); see also 2 Report of Charter Revision Comm’n at 86 (“The term ‘general applicability’ encompasses any statement or communication that applies similarly to members of a class, regardless of the number of members in any such class.”). Similarly, the Procedure states that “[i]f an applicant has tenancy rights at any housing option, that residence will be deemed the viable housing option and the applicant will be found ineligible, provided there is no imminent threat to health or safety.” (R. 152) (emphasis added). DHS is not free to disregard the mandated outcome where there is no imminent threat. In addition, the provision which states that “[a]ny single adult applicant with on-hand assets in excess of $2,000 must utilize his/her resources to reduce or eliminate his/her need for emergency shelter,” (R. 154 (emphasis added)) and the provision stating that applicants who request a State Fair Hearing to review adverse decisions “will not be granted THA while the hearing is pending” (R. 158 33 (emphasis added)) do not allow for the exercise of any discretion. Thus, even if the Procedure as a whole were not a rule (which it is), all of these elements of the Procedure would be subject to CAPA’s rulemaking requirements because they would “substantially alter or, in fact, … determine the result of future agency adjudications.” Alca Indus., 92 N.Y.2d at 778. Furthermore, there are many elements of the Procedure that “prescribe[] the procedural requirements of an agency” without discretion. See Charter § 1041(5)(ii). For example, DHS “shall investigate all residences where [an] individual has resided” in the year before seeking shelter (R. 152 (emphasis added)). DHS “must provide all applicants with notification of DHS’ determination” regarding shelter. (R. 156 (emphasis added)). If an adult seeking shelter has left a housing option because of domestic violence, the City’s Human Resources Administration – not DHS – “will” evaluate the credibility of the claim. (R. 153-54 (emphasis added). Courts have held that similar procedures are “rules” under CAPA. In Matter of 439 E. 88 Owners Corp. v. Tax Comm’n, 307 A.D.2d 203, 203 (1st Dep’t 2003), for example, the court held that a New York City Tax Commission policy, which denied review and summarily confirmed the assessments of property owners who refused to provide required information, was a rule. This is closely analogous to the policy set forth in the Procedure whereby women and men who are not 34 suffering from a physical or mental impairment will be denied shelter if they fail to “provid[e] all information and documentation” requested by DHS (R. 151), including “a release authorizing DHS to disclose and collect medical and other personal information” (R. 155). See also Matter of H.D. Services, LLC v. New York State Comptroller, 51 A.D.3d 1236, 1238 (3d Dep’t 2008) (holding that agency’s policy requiring applicants to produce notarized finder agreements was a rule). POINT II CAPA’S EXCEPTION FOR A STATEMENT WHICH IN ITSELF HAS NO LEGAL EFFECT BUT IS MERELY EXPLANATORY DOES NOT APPLY DHS’s second argument – that the Procedure falls within CAPA’s exception for a statement “which in itself has no legal effect but is merely explanatory,” Charter § 1041(5)(b)(ii) – ignores the profound and very real effects that the Procedure would have on the thousands of women and men who would be denied shelter if the Procedure is implemented, and misreads both CAPA and the State provisions on which DHS purports to rely. A. The Procedure Would Have a Profound Effect on New Yorkers Seeking Shelter A woman or man seeking shelter in New York City today is not subject to any investigation into their prior housing or assets and DHS does not deny shelter 35 to women or men if they fail to prove that they have no other available housing or no means to obtain other housing. (R. 50, 52, 161-63, 278, 349). DHS’s Commissioner testified at a City Council Hearing that if the Procedure were implemented it could affect up to 60% of the women and men seeking shelter,15 and estimated that at least ten percent of those who receive shelter under current policy would be denied THA (R. 190).16 15 Hearing of Committee on General Welfare, New York City Council (Nov. 9, 2011) at 86-87 (available at The notion that a policy that would have such a significant impact on the lives of so many New Yorkers, has “no legal effect, but is merely explanatory” defies the plain meaning of CAPA and the clear intent of the law, which “is to inform and gather input from the public on the development and promulgation of the myriad of City agency rules that affect New Yorkers: to provide accountability and openness.” 1700 York Assocs. v. Kaskel, 182 Misc. 2d 586, 594 (Civ. Ct. N.Y. County 1999) (internal quotation marks and citations omitted); see also 2 Report of Charter Revision Comm’n at 86-87 (explaining that the exclusions in § 1041(5)(b) “apply primarily to an agency’s resource allocation, work force deployment, purely internal procedures and city employment-related matters.”). http://legistar.council.nyc.gov/View.ashx?M=F&ID=1627093&GUID=C414E8A5- 0BAB-4BB7-A6BD-148A1F8F44D2); see also (R. 178). 16 Nearly 18,000 single adults entered the DHS shelter system in Fiscal Year 2012. See Mayor’s Management Report (2012) at 101 (available at http://www.nyc.gov/html/ops/downloads/pdf/mmr0912/dhs.pdf). 36 DHS argues that the Procedure is exempt from CAPA’s rulemaking requirements because “[n]otwithstanding some minor additions, the Procedure is no more than DHS’s restatement, interpretation, and explanation of State law….” DHS Br. at 30-31. However, this argument incorrectly conflates a statement that implements a legal mandate with a statement “which in itself has no legal effect but is merely explanatory.” Charter § 1041(5)(b)(ii). Under CAPA, these concepts are distinct, with only the latter being exempt from the full rulemaking process. Charter § 1043(d)(4) states that review by the law department and the mayor’s office, “shall not apply to rules that: … (iv) implement particular mandates or standards set forth in newly enacted federal, state, or local laws, regulations, or other requirements with only minor, if any, exercise of agency discretion in interpreting such mandates or standards.” By implication, such rules are subject to the other rulemaking requirements – e.g., notice and the opportunity for public comment.17 Under DHS’s construction of CAPA, by contrast, any policy adopted by a city agency pursuant to a mandate in state law, regulation, or administrative Indeed, CAPA’s general definition of a rule includes a statement that “implements or applies law….” Charter § 1041(5)(i). Thus, far from excluding procedures that implement legal mandates from rulemaking, the plain language of CAPA expressly includes them. 17 See 1 McKinney’s Statutes § 240 (Expression of One Thing as Excluding Others). 37 directive would have “no legal effect” and therefore be exempt from rulemaking. But this is clearly wrong as it would render § 1043(d)(4)(iv) meaningless, violating a well-established canon of statutory construction. See, e.g., Majewski v. Broadalbin-Perth Cent. School Dist., 91 N.Y.2d 577, 587 (1998) (“[L]egislation is to be interpreted so as to give effect to every provision.” (citing inter alia 1 McKinney’s Statutes § 98(a))). Thus, even assuming, arguendo, that DHS is correct that the Procedure merely implements State Regulation and Administrative Directives and that DHS exercised “only minor, if any, … discretion in interpreting such mandates or standards,” the Procedure would still be a “rule” under CAPA and subject to all of the requirements set forth in Charter § 1043 except review by the law department and Mayor’s office. See Charter § 1043(d)(4)(iv).18 In the six briefs DHS has submitted in this case to date, it has never even attempted to address § 1043(d)(4)(iv) and has not identified a single case in which a court held that a City agency was exempt from CAPA because it acted pursuant to State law or rule, let alone a state administrative directive. 19 18 It should be noted that SAPA does not contain a provision analogous to Charter § 1043(d)(4)(iv). Therefore, while the Procedure would be a rule even under SAPA’s definition, the specific language in CAPA relating to rules that implement particular mandates forecloses entirely DHS’s interpretation of CAPA’s “no legal effect” language. DHS’s exclusive reliance on SAPA cases ignores the clear intent of CAPA’s drafters, evidenced in the text of Charter § 1043(d)(4)(iv), that the “no legal effect” language in § 1041(5)(b)(ii) should not be interpreted to exclude all agency action taken pursuant to a legal mandate from the rulemaking process. Such a holding 19 Indeed, even state agencies must go through the rulemaking process for actions taken pursuant to a legal mandate. See Matter of Home Care Ass’n of New York State, Inc. v. Dowling, 218 38 would not only be unprecedented and contrary to the plain language of CAPA, but would also contravene the fundamental objective of providing “a central place where anyone may examine in that one place what the law or rule is that affects his particular interest.” Matter of Jones v. Smith, 64 N.Y.2d at 1006 (citation omitted); see Matter of New York State Coalition of Public Employers v. New York State Dep’t of Labor, 60 N.Y.2d 789, 791 (1983) (holding that adoption of federal OSHA standards pursuant to N.Y. Labor Law nonetheless subject to SAPA’s rulemaking requirements). In essence, DHS’s argument is that this objective would be satisfied in this case, notwithstanding the fact that the “law or rule … that affects” a person’s eligibility for shelter in New York City could not be found in either the Rules of the City of New York, or indeed even the N.Y.C.R.R., but in an unpublished document issued by DHS purportedly in reliance on an unpublished administrative directive issued by OTDA. This falls well short of the standard of accountability and openness courts have applied to agency policies. See, e.g., New York State A.D.2d 126, 129 (3d Dep’t 1996) (holding that an agency directive issued pursuant to a legal mandate was subject to rulemaking procedure); see also, e.g., Notice of Proposed Rule: Air Emissions From Surface Coating Facilities, 2012-44 N.Y. St. Reg. 33, 34 (proposed October 31, 2012) (adopted June 21, 2013) (proposing “rulemaking to satisfy New York's obligations under the [Clean Air Act]” which requires states to submit implementation plans); Notice of Proposed Rule: Quality Assurance Requirements for Medical Use of Radioactive Materials and Radiation Therapy, 2012-40 N.Y. St. Reg. 20 (proposed October 3, 2012) (adopted May 8, 2013) (proposing state regulation pursuant to the Atomic Energy Act which “requires New York to adopt and enforce regulatory standards for the use of radioactive materials that are comparable to or exceed federal regulatory standards that apply to the use of radioactive materials”). 39 Coalition of Public Employers, 60 N.Y.2d at 791 (holding the objective of providing a common definite place where rules can be found was not met where even a duly promulgated rule incorporated by reference rules issued by different level of government). The principal case on which DHS relies, Cubas v. Martinez, 8 N.Y.3d 611 (2007), is inapposite. In that case, as in Medical Society, NYCTA, and Roman Catholic Diocese, the statement at issue was an explanation by an agency of the agency’s own duly promulgated regulation. See Cubas, 8 N.Y.3d at 621 (holding that agency requirement “does not impose a new obligation on applicants for driver's licenses. The obligation to supply ‘proof that [the applicant] is not eligible for a social security number’ is imposed by a preexisting regulation, 15 NYCRR 3.9 (a).”). This differs substantially from DHS’s defense of the Procedure, which rests primarily on an administrative directive that was issued by a different agency at a different level of government, did not go through the rulemaking process and is not available to the public as part of either state or city rules.20 20 The two lower court decisions relied on by DHS, National Ass’n of Indep. Insurers v. State of New York (“NAII”), 207 A.D.2d 191 (2d Dep’t 1994) and DeBonis v. Corbisiero, 178 A.D.2d 183 (1st Dep’t 1991), see DHS Br. at 35-36, are both penalty guidelines cases and are inapposite for the reasons discussed above. See supra at Point I.B. To the extent NAII can be read as extending the principle beyond interpretations of an agency’s own regulations, the facts are easily distinguishable from this case. In contrast to the state regulations relied upon by DHS, which provide at best a vague directive, see 18 N.Y.C.R.R. 352.35(c)(1) (“[A]n individual or family must cooperate in and complete an assessment conducted by the social services district.”), the statute at issue in NAII was highly specific: “carriers are required to produce credit vouchers 40 Moreover, unlike the underlying requirement at issue in Cubas, one of the central requirements that would be imposed by the Procedure – that women and men seeking shelter demonstrate by clear and convincing proof that they have no alternative housing or means – has never been applied by DHS. Thus, whereas the policy being challenged in Cubas “does not create or deny substantive rights of members of the public – i.e., it does not provide that some people are eligible and some ineligible for driver’s licenses,” Cubas, 8 N.Y.3d at 621, the Procedure would deny substantive rights to members of the public – i.e., it does provide that some people are eligible and some ineligible for THA. Finally, while acknowledging “no clear bright line between a ‘rule’ or ‘regulation’ and an interpretive policy,” the Cubas court noted that “requirements that we have held to be ‘rules’ or ‘regulations’ were generally broader, and of more direct public impact, than the” narrow question at issue in that case of whether the Department of Motor Vehicles could require applicants to submit specific documentation from the Department of Homeland Security to prove ineligibility for a social security number. Id. (citations omitted). The Procedure, which would and stubs which are ‘serially-numbered, counterfeit-proof and non-transferable in accordance with specifications prescribed by the commissioner of taxation and finance.’” 207 A.D.2d at 203 (quoting Tax Law § 341(d)(1) [repealed]), leaving minimal discretion to the agency. Moreover, the court found that the agency’s specifications were not “a fixed general principle” because they “indicate that the agency will be flexible in the manner in which” they were to be applied. NAII, 207 A.D.2d at 204. Finally, NAII interprets SAPA, not CAPA, which contains specific language pertaining to agency action taken pursuant to a legal mandate. See supra at n16. 41 represent a fundamental change in shelter policy for all single adults in New York City, is clearly broader, and of more direct public impact, than the directive at issue in Cubas. B. State Regulations and Directives Do Not Require DHS to Implement the Procedure Even if CAPA’s language and the case law did not contradict DHS’s overbroad reading of the Charter’s exemption for a statement “which in itself has no legal effect but is merely explanatory,” the Procedure would be still be subject to rulemaking because it is not required by the State Regulation and Administrative Directives cited by DHS. Perhaps the strongest evidence of this is the fact that the State Regulation and Directives on which DHS relies are more than 16 to 18 years old, and yet it is undisputed that DHS has never before implemented anything like the Procedure for single adults (R. 50, 52, 161-63, 278, 349). As Supreme Court noted, “If the [Procedure] is merely a strict interpretation of the State Regulation and Administrative Directives, the procedures would have been in place for at least the last 15 years.” (R. 25). Even setting aside DHS’s 18 years of inaction, its statements immediately prior to this litigation also demonstrate that it did not believe it was required to implement the Procedure, only that it was permitted to do so. Commissioner 42 Diamond testified to the Council that the way “the relationship with the State works is the State issues regulations in the social services area and localities are free to design their programs within the limits of those regulations. So we believe that because they determined that this program, this procedure that we’re going to implement, is consistent with the regulations, we could go forward.” (R. 182-83). Furthermore, it would make little sense for DHS to seek approval from the State to merely explain what the State had long required, yet Commissioner Diamond conceded that DHS “absolutely” needed “technical approval” from the State before it could implement the Procedure (R. 187). And indeed, even the Procedure itself does not state that it implements a State requirement, merely that it “is consistent with the purposes underlying the Regulation” (R. 149) (emphasis added). In addition, statements from OTDA, the successor to the State agency which issued the regulation and directives on which DHS relies,21 Any suggestion that the Office of Temporary and Disability Assistance (“OTDA”) approved the New York City Department of Homeless Services (“DHS”) proposed shelter eligibility procedure for single homeless adults is inaccurate. OTDA has make clear that the State did not believe DHS was required to implement the Procedure, only that the Procedure was not inconsistent with State law. On November 9, 2011, OTDA wrote to DHS: 21 OTDA assumed responsibility for the functions of the former Department of Social Services concerning shelters for adults in 1997. See N.Y. Laws of 1997, ch. 436, § 122(a), (f). 43 not commented on the substantive merits of the proposed change, but instead determined that the proposal was not inconsistent with State law. Moreover, this office has serious concerns that DHS failed to submit this proposal to the New York Supreme Court for review. For over thirty years, such a review process has been DHS’s practice when making a policy change relating to the Callahan Consent Decree. Given DHS’s failure to share this policy with the Court, OTDA finds the November 14th implementation date – a mere ten days after the policy change was announced – to be completely unreasonable and is not supported by the State. (R. 169) (footnote omitted). Finally, as Supreme Court found, the Procedure “imposes many new obligations on applicants” that are not in the State Regulation or Administrative Directives. (R. 23-24). For example, the court noted that neither the State Regulations nor the Administrative Directives mandate that an applicant for THA sign a release for private information, yet the Procedure states that any woman or man who seeks shelter “will complete” an application that “will also contain a release that the applicant must sign authorizing DHS to disclose and collect medical and other personal information…” (R.25; see R. 155). And neither the State Regulations nor the Administrative Directives contain the directive found in the Procedure that “tenancy rights at any housing option … will be deemed the viable housing option and the applicant will be found ineligible, provided there is no imminent threat to health or safety.” (R. 25; see R. 152). CONCLUSION For the foregoing reasons, the February 14,2013 order of the Appellate Division, First Departlnent, unanilnously affirming the March 16, 2012 order of Suprelne Court, granting Petitioner-R_espondent's Article 78 petition should be affinned. Dated: New York, New York July31,2013 Chief of Litigation The Council of the City of New York 250 Broadway, 15th Floor Ne\v York, New York 10007 (212) 788-9131 jmetzler@council.nyc.gov Attorney for Petitioner-Respondent 44