In the Matter of Patrolmen's Benevolent Association of the City of New York, Inc., et al., Appellants,v.City of New York, et al., Respondents.BriefN.Y.Oct 27, 2015 COURT OF APPEALS NO. APL-2014-00205 State of New York Court of Appeals ________________ In the Matter of the Application of THE PATROLMEN’S BENEVOLENT ASSOCIATION OF THE CITY OF NEW YORK, INC., on behalf of itself and POLICE OFFICER JOSEPH ANTHONY, POLICE OFFICER BRIAN MCGUCKIN, POLICE OFFICER MICHAEL HERNANDEZ, and all Delegates and Police Officers Assigned to the precincts within the “Bronx Patrol Borough”, Petitioners-Appellants, - against - THE CITY OF NEW YORK, THE NEW YORK CITY POLICE DEPARTMENT and RAYMOND W. KELLY, in his official capacity as the Commissioner of THE NEW YORK CITY POLICE DEPARTMENT, Respondents-Respondents. REPLY BRIEF OF PETITIONERS-APPELLANTS GLEASON DUNN WALSH & O’SHEA Attorneys for Petitioners-Appellants 40 Beaver Street Albany, New York 12207 (518) 432-7511 Of Counsel, Ronald G. Dunn, Esq. Supreme Court, New York County, Index No. 113039/11 i TABLE OF CONTENTS TABLE OF AUTHORITIES ..................................................................................... ii CORPORATE DISCLOSURE STATEMENT ........................................................iii PRELIMINARY STATEMENT ............................................................................... 1 LEGAL ARGUMENT ............................................................................................... 1 THE APPELLATE DIVISION IMPROPERLY DECIDED THE UNDERLYING MERITS.......................................................................................... 2 CPLR ARTICLE 63 STANDARDS FOR AN INJUNCTION SHOULD NOT APPLY TO AN APPLICATION UNDER CPLR § 7502 ............................... 4 SCOPE AND DISPOSITION OF THIS APPEAL ................................................... 7 CONCLUSION .......................................................................................................... 9 PRINTING SPECIFICATIONS STATEMENT ..................................................... 10 ii TABLE OF AUTHORITIES Cases Braschi v Stahl Assoc. Co., 74 NY2d 201 (1989) ..................................................... 8 Matter of Aaron J., 80 NY2d 402 (1992) .................................................................. 6 Matter of Nationwide Gen. Ins. Co. v Investors Ins. Co. of Am., 37 NY2d 91 (1975) ................................................................................................. 3 Matter of Silverman (Benmor Coats), 61 NY2d 299 (1984) ..................................... 2 Matter of Wilaka Constr. Co. (New York City Hous. Auth.), 17 NY2d 195 (1966) ............................................................................................... 3 Parochial Bus. Syst., Inc. v Bd. of Ed. NYC, 60 NY2d 539 (1983) ........................... 5 SG Cowen Securities Corp. v Messih, 224 F3d 79 (2d Cir. 2000) .................... 4, 6, 7 Statutes CPLR § 5601(a) ......................................................................................................... 8 CPLR § 7501..................................................................................................... passim CPLR § 7502.......................................................................................................... 4, 5 CPLR § 7502(c) ................................................................................................. 5, 6, 7 CPLR Article 62 .................................................................................................... 4, 6 CPLR Article 63 ............................................................................................ 2, 4, 6, 7 CPLR Article 75 ........................................................................................................ 5 Other Authorities McKinney’s Cons. Laws of N.Y., Book 1, Statutes § 73 .......................................... 5 McKinney’s Cons. Laws of NY, Book 1, Statutes § 221(a) ..................................... 6 iii CORPORATE DISCLOSURE STATEMENT Pursuant to Rule 500.1(f) of the Court’s Rules of Practice, the Petitioner-Appellant, The Patrolmen’s Benevolent Association of the City of New York, Inc., is a domestic not-for-profit corporation that has no parent corporation, subsidiaries or affiliates. 1 PRELIMINARY STATEMENT This reply brief is submitted on behalf of the Petitioners-Appellants, the Patrolmen’s Benevolent Association of the City of New York, Inc., on behalf of itself and Police Officer Joseph Anthony, Police Officer Brian McGuckin, Police Officer Michael Hernandez (the “Union Representatives”), and all Delegates and Police Officers assigned to precincts within the “Bronx Patrol Borough” (collectively referred to as the “Appellants” or “PBA”) in response to the Brief of Respondents The City of New York (“City”), the New York City Police Department (“Police Department”) and the Police Commissioner, collectively referred to as the City or Respondents. We refer to the Petitioners-Appellants’ main brief for a complete discussion of the relevant facts and legal arguments. LEGAL ARGUMENT In its brief the City asks the court to gloss over two central truths: The majority of the Appellate Division applied the wrong standard of review in examining the Supreme Court’s exercise of discretion in granting an injunction in aid of arbitration. In the process, the majority interpreted a contract document on the ultimate merits of the arbitration dispute. That act by the Appellate Division is expressly prohibited by CPLR § 7501 and inconsistent with decisions of this Court holding that the Arbitrator, not the Courts, decides the merits of a dispute. 2 The City also incorrectly argues that the Courts should apply CPLR Article 63 standards to injunctions in aid of arbitration. That is inconsistent with the plain language of the statute enacted by the Legislature and longstanding canons of statutory construction used by this Court in interpreting legislation. We address each issue in order: THE APPELLATE DIVISION IMPROPERLY DECIDED THE UNDERLYING MERITS CPLR § 7501 explicitly limits a Court’s role on an application under Article 75: “the Court shall not consider whether the claim is tenable, or otherwise pass on the merits of the dispute.” (CPLR § 7501). Despite this prohibition, the entire basis for three judge majority decision is its view of the underlying merits of the arbitration (R 574-575). In doing so, the majority interpreted contract language by reading into the document words that the majority found were implied by “reasonable inference” (R 576). Based on the implied inference the majority held that the contract language gave the City the unfettered right to interpret the contract terms. One would be hard pressed to find a clearer example of a court deciding the ultimate merits and in the process improperly removing that function from the arbitrator (see Matter of Silverman [Benmor Coats], 61 NY2d 299, 307 [1984] [“infer[ring] a limitation from the substantive provisions of an agreement containing an arbitration clause...is to involve the courts in the merits of the 3 dispute—interpretation of the contract provisions—in violation of the legislative mandate”]; Matter of Nationwide Gen. Ins. Co. v Investors Ins. Co. of Am., 37 NY2d 91 (1975); Matter of Wilaka Constr. Co. [New York City Hous. Auth.], 17 NY2d 195, 204 [1966]). As the Supreme Court properly held, and two dissenting judges agreed, the Union Representatives made an appropriate showing that they had a likelihood of success on the underlying merits (R 15). That showing was well supported by the record. As such, the Supreme Court did not abuse it discretion in granting an injunction in aid of arbitration. That showing, at a minimum, reveals that there is a substantial question on the underlying merits. That question on the merits is for the arbitrator, not the courts, to decide (see CPLR § 7501). It was error for the Appellate Division to ignore the prohibition of CPLR § 7501 and expressly determine the ultimate merits. The City argues that arbitration decisions issued in the 1980s involving different parties and different facts further buttress the Appellate Division’s decision (City Brief pp. 27-29). The Appellate Division did not cite to these decisions in making its decision on the merits. But the Supreme Court did and correctly dismissed their relevance with the conclusion: “The determination of one arbitration is not necessarily predictive of the outcome of this arbitration.” (R 14). 4 That is particularly true in this case involving different parties, different facts, and a different history applying and interpreting a contract document. That is the precise issue for the arbitrator, not the Courts to decide. CPLR ARTICLE 63 STANDARDS FOR AN INJUNCTION SHOULD NOT APPLY TO AN APPLICATION UNDER CPLR § 7502. Whether the CPLR Article 62 and 63 injunction standards apply to an injunction in aid of arbitration under CPLR § 7502 is a question of first impression for this court. The City in its brief asks this Court to follow the reasoning of the Second Circuit Court of Appeals which addressed the issue in the case of SG Cowen Securities Corp. v Messih, 224 F3d 79 (2d Cir. 2000) (see City Br. pp. 22-25). However, in Cowen, the Circuit Court expressly acknowledged that this Court has not ruled on this important issue (SG Cowen Securities Corp., 224 F3d at 83 n. 1). The Federal Court in Cowen incorrectly analyzed the plain language of the statue and incorrectly summarized the legislative history to reach the wrong result. As this Court has held, it is not an appropriate role for the Courts to rewrite the plain language of a statute based on its own views of what is more efficient. “The necessary starting point is the statute itself. A statute must be read and given effect as it is written by the Legislature, not as the court may think it should or would have been written if the Legislature had envisaged 5 all of the problems and complications which might arise in the course of its administration.” (Parochial Bus. Syst., Inc. v Bd. of Ed. NYC, 60 NY2d 539, 549-49 [1983]; see also McKinney’s Cons. Laws of N.Y., Book 1, Statutes § 73). CPLR § 7502 plainly states that: “the sole ground for the granting of the remedy should be as stated above.” (CPLR § 7502[c]). The referenced language is “the award to which the applicant may be entitled may be rendered ineffectual without such provisional relief” (see CPLR § 7502[c]). Contrary to what the City argues and other Appellate Courts held, this language explicitly limits the grounds for an injunction. Assuming the Court finds this statutory language standing alone is ambiguous, then we must turn to other provisions in Article 75 to see the overarching legislative intent. CPLR Article 75 begins with the directive that: “In determining any matter arising under this article, the Court shall not consider whether the claim with respect to which arbitration is sought is tenable or otherwise pass upon the merits of the dispute.” (see CPLR § 7501). Under well-established canons of construction, we look to CPLR §§ 7501 and 7502(c) in pari materia to glean statutory intent. This 6 “is the obligation to harmonize the various provisions of related statutes and to construe them in a way that renders them internally compatible.” (Matter of Aaron J., 80 NY2d 402, 409 [1992]; see also McKinney’s Cons. Laws of NY, Book 1, Statutes § 221[a] at p. 376). Read together, these two provisions reveal that the Legislature intended that the grounds for an application for provisional relief preliminary to arbitration are limited. That statutory prohibition in CPLR § 7501 directing that the Court not pass on the underlying merits is inconsistent with the CPLR Art. 63 standards requiring a showing of a likelihood of success on the merits. Even if we were to look behind the plain language at the Legislative history, a review reveals nothing about the Legislature’s thinking. The Second Circuit in Cowen apparently gave great weight to a letter from the New York State Bar Association which implies that CPLR § 7502(c) supplements but does not replace CPLR Art. 62 and 63 standards. However, the Bar Association is not the Legislature. Nowhere in the Legislative history are there other indicia that the plain language of the statute should be read otherwise or that Section 7502(c) should be read as incorporating the standards in CPLR Art. 63. 7 The Second Circuit Court in Cowen and the lower Court’s Decisions that followed Cowen are simply wrong in holding that the legislative history supports a reading inconsistent with the plain language. Even if CPLR §§ 7501 and 7502(c) are read so as to include Article 63, the terms of Section 7501 would perforce modify the showing required on a likelihood of success on the merits. As noted above, the Courts are required to harmonize these statutes. You cannot do that by ignoring CPLR § 7501. For this reason, it was error for the Appellate Division to even get to the question of whether the PBA made an adequate showing of a likelihood of success on the merits. SCOPE AND DISPOSITION OF THIS APPEAL The City’s asserts that if the Court holds that the First Department improperly decided the merits in reversing the Supreme Court’s grant of an injunction in aid of arbitration, the Court must remit this case to the First Department to address the elements of the PBA’s injunction application left unaddressed by the majority of the First Department (City’s Br. at p. 31). As the First Department majority premised its reversal of the Supreme Court solely on a matter of law, under this Court’s past precedent “all remaining issues” addressed by the Supreme Court but left undisturbed by the First Department are “beyond this court’s scope of review” (Braschi v Stahl Assoc. Co., 74 NY2d 201, 214 8 [1989] [remitting case after reversing vacatur of preliminary injunction by First Department on likelihood of the merits grounds]). Following Braschi requires that this case be remitted to the First Department “so that it may exercise its discretionary powers in accordance with this decision” (Braschi, 74 NY2d at 214). However, Braschi is distinguishable because it involved a certified question of law from a unanimous First Department panel. In this case, a two-judge dissent from the First Department majority found that the Supreme Court did not abuse its discretion in granting the injunction and addressed each point left unaddressed by the majority. That dissent’s opinion provided the vehicle for the PBA’s pending as- of-right appeal under CPLR § 5601(a). The PBA respectfully submits that in light of this unique procedural posture, there are grounds to distinguish Braschi. If this Court distinguishes Braschi and decides to address the other elements underlying the Supreme Court’s grant of the PBA’s sought injunction in aid of arbitration, we submit that the dissent at the First Department correctly held that the Supreme Court did not abuse its discretion in issuing the injunction. The City’s arguments addressing the points left unaddressed by the First Department are fully rebutted in the PBA’s main brief, the Supreme Court decision, and the dissent at the First Department, and will not be repeated on reply. CONCLUSION THE SUPREME COURT DID NOT ABUSE ITS DISCRETION IN GRANTING A PRELIMINARY INJUNCTION IN AID OF ARBITRATION FOR THE SOLE PURPOSE OF MAINTAINING THE STATUS QUO PENDING AN ARBITRATION ON THE MERITS. Dated: April 27 ,2015 Respectfully submitted, GLEASON, DUNN, WALSH & O'SHEA By G. Esq Attorneys for Petitioners-Appellants Off,rce and Post Office Address 40 Beaver Street Albany, New York 12207 (s 18) 432-7srr Ronald G. Dunn, Esq. Of Counsel Of Counsel: MICHAEL T. MURRAY, ESQ. Office of the General Counsel of the Patrolmen' s Benevolent Association of the City of New York, Inc. Michael T. Murray Gaurav I. Shah David W. Morris 9 10 PRINTING SPECIFICATIONS STATEMENT This brief was prepared with Microsoft Word 2010 using Times New Roman 14 pt. for the body and Times New Roman 12 pt. for footnotes. According to the aforementioned processing system, the portions of the brief that must be included in a word count pursuant to 22 N.Y.C.R.R. §600.10(d)(1)(i) contains 1896 words.