In the Matter of County of Monroe, Appellant,v.Nirav R. Shah,, et al., Respondents.BriefN.Y.September 7, 2016To be argued by: Christopher E. Buckey, Esq. 10 minutes requested New York Supreme Court APPELLATE DIVISION - FOURTH DEPARTMENT Docket No. CA 14-01888 IN THE MATTER OF THE APPLICATION OF COUNTY OF MONROE, Petitioner/Plaintiff-Respondent/ Appellant, ~against~ NIRA V R. SHAH, AS COMMISSIONER OF THE NEW YORK STATE DEPARTMENT OF HEALTH AND THE NEW YORK STATE DEPARTMENT OF HEALTH, Respondents/Defendants-Appellants/Respondents. BRIEF FOR RESPONDENT/ APPELLANT COUNTY OF MONROE WHITEMAN OSTERMAN & HANNA LLP Christopher E. Buckey, Esq., Of Counsel Robert S. Rosborough N, Esq., Of Counsel One Commerce Plaza Albany, New York 12260 (518) 487-7600 BOND SCHOENECK & KING, PLLC Raymond A. Meier, Esq. 501 Main Street Utica, New York 13501 (315) 738-1223 NANCY ROSE STORMER, P.C. Nancy Rose Stormer, Esq., Of Counsel Michael Bagge, Esq., Of Counsel 1325 Belle Avenue Utlca, New York 13501 (315) 797-0110 Attorneys for Petitioner/Plaintiff Respondent/ Appellant County of Monroe Monroe County Index No. 2014-3162 TABLE OF CONTENTS TABLE OF AUTHORITIES ......................................................................................................... iii COUNTERSTATEMENT OF QUESTIONS PRESENTED ......................................................... 1 PRELIMINARY STATEMENT .................................................................................................... 1 COUNTERSTATEMENT OF FACTS ............ : ............................................................................. 4 The Medicaid Cap Statute ............................................................................................................... 7 Related Prior Litigation ................................................................................................................... 7 Section 61 of the 2012 Executive Budget Law ............................................................................. 10 Recent Overburden Claims Submitted .......................................................................................... 11 The Supreme Court Order ............................................................................................................. 11 ARGUMENT ................................................................................................................................ 12 POINT I PETITIONER HAS CAPACITY TO CHALLENGE SECTION 61 ................ 12 A. Respondents Challenge Petitioner's Capacity to Bring this Proceeding ................. 13 B. Respondents Waived the Capacity Defense ............................................................ 17 C. Petitioner has Capacity to Challenge Section 61 as a Matter of Law ...................... 18 POINT II SECTION 61 IS ONLY CONSTITUTIONAL IF CONSTRUED AS A LIMITATIONS PERIOD FOR THE RECOVERY OF OVERBURDEN REIMBURSEMENT ......................................................................................... 19 A. This Court Should Adopt the Third Depaitment'~ Interpretation of Section 61 ..... 19 B. Respondents' Interpretation of Section 61 Violates General Construction Law § 93 ............................................................................................. 25 POINT III SECTION 61 IS UNCONSTITUTIONAL BECAUSE IT RETROACTIVELY DEPRIVES PETITIONER OF ITS VESTED RIGHT TO REIMBURSEMENT ...................................................................... 27 A. Section 61 Unconstitutionally Deprives Petitioner of its Vested Property Right to Reimbursement. ....................................................................................................... 27 B. Petitioner's Vested Rights to Overburden Reimbursement Are Not Subject to Retroactive Impairment. .......................................................................................... 30 1. Section 61 is Manifestly Unfair. ............................................................................. 31 2. Petitioner Properly Relied on Its Clear Entitlement to Overburden Reimbursement Under Social Services Law § 3 68-a ............................................. 34 3. The Extent of Section 61 's Retroactivity is Excessive ........................................... 36 4. The Public Interest Requires Reimbursement of the Improperly Retained Overburden Payments to Petitioner ........................................................................ 39 POINT IV SUPREME COURT ERRONEOUSLY DECLINED TO COMPEL RESPONDENTS TO REIMBURSE PETITIONER PURSUANT TO SOCIAL SERVICES LAW§ 368-A ........................................................... 40 CONCLUSION ............................................................................................................................. 45 ii TABLE OF AUTHORITIES Federal Cases Rhem v Malcolm, 507 F2d 333 (2d Cir 1974) .............................................................................. 35 Township of River Vale v Town of Orangetown, 403 F2d 684 (2d Cir 1968) .............................. 16 State Cases Alliance of Am. Insurers v Chu, 77 NY2d 573 (1991) ........................................................... passim Alweis v Evans, 69 NY2d 199 (1987) ..................................................................................... 19, 21 Andrews, Pusateri, Brandt, Shoemaker & Roberson, P. C. v Niagara County Sewer Dist. No. 1, 71AD3d1374 (4th Dept 2010) ................................................................................................ 17 Boltja v Southside Hosp., 186 AD2d 774 (2d Dept 1992) ............................................................ 38 Brothers v Florence, 95 NY2d 290 (2000) ................................................................................... 24 Caprio v New York State Department of Taxation and Finance, 117 AD3d 168 (1st Dept 2014) ................................................................................................................... 30, 39 Cimo v State of New York, 306NY 143 (1953) ............................................................................ 20 City of New Yorkv Lawton, 128 AD2d 202 (3dDept 1987) ........................................................ 15 City of New Yorkv State of New York, 86 NY2d 286 (1995) ................................................ passim County of Rensselaer v Regan, 173 AD2d 37 (3d Dept 1991), affd 80 NY2d 988 (1992) .... 14, 18 Dorfman v Leidner, 76 NY2d 956 (1990) .................................................................................... 37 Franza v Olin, 73 AD3d 44 (4th Dept 2010) ................................................................................ 28 Gilbert v Ackerman, 159 NY 118 (1899) ................................................................................ 24, 33 Gulotta v State, 228 AD2d 555 (2d Dept 1996) ..................................................................... 15, 16 H. Kaiiffinan & Sons Saddlery Co. v Miller, 298 NY 38 (1948) .................................................. 24 Herzogv Board of Educ. of Lawrence Union Free School Dist., 171Misc2d 22 (Sup Ct, Nassau County 1996) .................................................................................................. 15 iii James Sq. Assoc. LP v Mullen, 91AD3d164 (4th Dept 2011), ajfd 21NY3d233 (2013) ........................................................................................ 27, 29, 30, 39 Jeter v Ellenville Cent~ School Dist., 41NY2d283 (1977) .............................................. 14, 15, 16 Klostermann v Cuomo, 61NY2d525 (1984) ......................................................................... 41, 42 Loretto v Teleprompter Manhattan CATV Corp., 58 NY2d 143 (1983) ...................................... 23 Matter of Albany Law School v New York State Off of Mental Retardation & Dev. Disabilities, 19 NY3d 106 (2012) ................................................................................................................. 19 Matter of Brusco v Braun, 84 NY2d 674 (1994) .......................................................................... 44 Matter of Chrysler Props. v Morris, 23 NY2d 515 (1969) ........................................................... 27 Matter of City of New Yorkv Lawton, 128 AD2d 202 (3d Dept 1987) ........................................ 16 Matter of Consolidated Edison Co. of NY. v Department of Envtl. Conservation, 71NY2d186 (1988) ................................................................................................................. 20 Matter of County of Cayuga v fl,lfcHugh, 4 NY2d 609 (1958) ...................................................... 15 Matter of County ofChemungv Shah,_ AD3d ___, 2015 NY Slip Op 00267 (3d Dept Jan. 8, 2015) ..................................................... , ........................................................... 2 Matter of County of Erie v Daines, 83 AD3d 1506 (4th Dept 2011) .............................................. 9 Matter of County of Erie v Daines, 96 AD3d 1432 (4th Dept 2012) .............................................. 9 Matter of County of Fulton v State of New York, 76 NY2d 675 (1990) ....................................... 44 Matter of County of Herkimer v Daines, 60 AD3d 1456 (4th Dept 2009), lv denied 13 NY3d 707 (2009) ........................................................................................... passim Matter of County of Herldmer v Daines, 83 AD3d 1510 (4th Dept 2011) ..................................... 9 Matter of County of Nassau v State of New York, 100 AD3d 1052 (3d Dept 2012), lv dismissed20NY3d1092 (2013) ........................................................................................... 16 Matter of County of Niagara v Daines, Sup Ct, Niagara County, Kloch, Sr., J., Feb. 18, 2010, Index No. 137680 .............................................................................................. 10 Matter of County of Niagara v Daines, 60 AD3d 1460 (4th Dept 2009) ....................................... 9 Matter of County of Niagara v Daines, 79 AD3d 1702 (4th Dept 2010), lV lv denied 82 AD3d 1719 (4th Dept 2011), lv denied 17 NY3d 703 (2011) ............................ 8, 9 Matter of County of Niagara v Daines, 91AD3d1288 (4th Dept 2012), lv denied 94 AD3d 1481 (4th Dept 2012) .......................................................................... passim Matter of County of Niagara v Shah, 122 AD3d 1240 (4th Dept Nov. 14, 2014) .................... 2, 22 Matter of County of St. Lawrence v Daines, 81AD3d212 (3d Dept 2011), Iv denied 17NY3d 703 (2011) ........................................................................................... passim Matter of County of St. Lawrence v Shah, 95 AD3d 1548 (3d Dept 2012) ........................... passim Matter of County of St. Lawrence v Shah, 124 AD3d 88 (3d Dept Nov. 26, 2014), lv denied_ AD3d _ (3d Dept Jan. 23, 2015), Iv pending undecided ............................. passim Matter of Crespo, 123 Misc 2d 862 (Sup Ct, New York County 1984) ....................................... 16 Matter of Graziano v County of Albany, 3 NY3d 475 (2004) ...................................................... 14 Matter of Hodes v Axelrod, 70 NY2d 364 (1987) ........................................................................ 28 Matter of Island Waste Servs., Ltd v Tax Appeals Trib. of State of NY., 77 AD3d 1080 (3d Dept 2010), lv denied 16 NY3d 712 (2011) ....................................................................... 38 Matter ofKrauskopfv Perales, 139AD2d147 (3d Dept 1988), ajfd74 NY2d 730 (1989) .... 3, 19 Matter of Monroe County Pub. School Dists. v Zyra, 51AD3d125 (4th Dept 2008), Iv denied 52 AD3d 1293 (4th Dept 2008) ................................................................................. 22 Matter of Paver & Wildfoerster (Catholic High School Assn.), 38 NY2d 669 (1976) ................. 22 Matter of Roosevelt Raceway v Monaghan, 9 NY2d 293 (1961) ................................................. 38 Matter of Thomas v Bethlehem Steel Corp., 63 NY2d 150 (1984) ............................................... 38 Matter ofTiffany, 179 NY 455 (1904) .......................................................................................... 20 Matter ofTown of Moreau v County of Saratoga, 142 AD2d 864 (3d Dept 1988) ...................... 14 New York Blue Line Council v Adirondack Park Agency, 86 AD3d 756 (3d Dept 2011), app dismissed 17 NY3d 947 (2011), Iv denied 18 NY3d 806 (2012) ....................................... 14 0 'Neil v State of New York, 223 NY 40 (1918) ............................................................................ 35 People ex rel. Francis v Common Council, 78 NY 33 (1879) ...................................................... 43 v People v ME., 121AD3d157 (4th Dept 2014) ............................................................................ 29 Pines v State of New York, 115 AD3d 80 (2d Dept 2014), appeal dismissed23 NY3d 982 (2014) ..................................................................................... 20 Purcell v Regan, 126 AD2d 849 (3d Dept 1987), Iv denied 69 NY2d 613 (1987) ....................... 16 Ring v Jones, 13 AD3d 1078 (4th Dept 2004) .............................................................................. 18 Rivera v Laporte, 120 Misc 2d 733 (Sup Ct, New York County 1983) ....................................... 16 Roman Catholic Diocese of Albany, NY. v New York State Workers' Compensation Bd, 96 AD3d 1288 (3d Dept 2012) ................................................................................................. 24 Stiver v Good & Fair Carting & Moving, Inc., 32 AD3d 1209 (4th Dept 2006), affd9NY3d253(2007) ............................................................................................................ 18 Town of Delhi v Telian, 119 AD3d 1049 (3d Dept 2014) ............................................................ 17 Village of Herkimer v Axelrod, 58 NY2d 1069 (1983) ................................................................. 15 Statutes CPLR 321 l(a)(3), (e) .................................................................................................................... 17 General Construction Law § 93 .................................................................................................... 25 L 2005, ch 58, pt C, § 1.. .................................................................................................................. 7 L 2005, ch 58, part C, § l(c) ......................................................................................................... 37 L 2010, ch 109, part B, § 24 ........................................................................................................... 8 L 2010, ch 109, part B, § 40(c) ..................................................................................................... 28 L 2012, ch 56, part D, § 61 .............. ." .............................................................................................. 1 L 2012, ch 56, part D, § 65(k) ................................................................................................. 22, 28 Social Services Law § 368-a .................................................................................................. passim Social Services Law § 368-a(l )(h) ........................................................................................ passim Social Services Law§ 368-a(l)(h)(i) ................................................................................ 20, 35, 41 VJ Regulations 18 NYCRR § 601.3 ......................................................................................................................... 7 Other Authorities Merriam-Webster's Collegiate Dictionary, at 228 (11th ed 2004) ............................................... 37 Vll COUNTERSTATEMENT OF QUESTIONS PRESENTED 1. Did Supreme Court, Momoe County (Polito, J.), properly declare Section 61 of Part D of Chapter 56 of the Laws of2012 ("Section 61") unconstitutional? Supreme Court properly held that Section 61 retroactively impaired Petitioner's vested right to reimbursement for the overburden expenses that it incuned on Respondents' behalf prior to January 1, 2006 pursuant to Social Services Law § 368-a and was therefore unconstitutional. 2. Did Supreme Court, Momoe County enoneously decline to compel Respondents to calculate and reimburse Petitioner for the total remaining overburden expenses that it incurred on Respondents' behalf prior to January 1, 2006 in accordance with the clear statutory mandates of Social Services Law § 368-a(l )(h)? Supreme Court enoneously denied Petitioner's request for mandamus relief compelling Respondents to calculate and reimburse Petitioner for the total remaining overburden expenses that it incuned on Respondents' behalf prior to January 1, 2006 in accordance with Social Services Law § 368-a. PRELIMINARY STATEMENT Petitioner County ofMomoe ("Petitioner") respectfully submits this briefin opposition to the appeal of Respondents Nirav R. Shah, as Commissioner of the New York State Department of Health, and the New York State Department of Health (collectively, "Respondents") and in support of its cross appeal from the Decision and Order of Supreme Court, Momoe County (Polito, J.), dated June 24, 2014 and entered July 3, 2014, declaring Section 61 of the 2012 Executive Budget unconstitutional, annulling the determination of Respondents to deny Petitioner's claims for overburden reimbursement, and directing Respondents to pay Petitioner's claims in the total amount of $4,713,748.94. Supreme Court, however, denied Petitioner's request for mandamus relief compelling Respondents to calculate and pay Petitioner for the total remaining overburden reimbursements owed. The reimbursement sought in this proceeding is for Medicaid local share payments made by Petitioner commonly known as "overburden" under Social Services Law§ 368-a. The Third Department recently decided issues identical to the ones presented in this appeal in Matter of County of St. Lawrence v Shah (124 AD3d 88 [3d Dept Nov. 26, 2014] ["St. Lawrence III"], lv denied_ AD3d _ [3d Dept Jan. 23, 2015], lv pending undecided) and Matter of County of Chemung v Shah L AD3d _, 2015 NY Slip Op 00267 [3d Dept Jan. 8, 2015] ["Chemung"]). This Court also recently decided Matter of County of Niagara v Shah (122 AD3d 1240 [4th Dept Nov. 14, 2014]), remitting the matter to Supreme Court, Niagara County for further proceedings. Similar proceedings relating to the counties' entitlement to overburden reimbursement are also presently before this Court in Matter of County of Jefferson v Shah (Appeal No. CA 14-00926), Matter of County of Chautauqua v Shah (Appeal No. CA 14-00923), Matter of County of Genesee v Shah (Appeal No. CA 14-01041), Matter of County of Oneida v Shah (Appeal No. CA 14-01405), and Matter of County of Cayuga v Shah (Appeal No. CA 14-01886) and before the Third Department in Matter of County of Broome v Shah (Appeal No. 519909). This Court should follow the Third Department's decisions in St. Lawrence Ill and Chemung. In St. Lawrence Ill, the Third Department reaffirmed that Petitioner acquired vested rights to reimbursement under Social Services Law § 368-a w:hen it paid the State for overburden expenses prior to 2006 for which no local share was owed, but held that Section 61 could be construed to avoid the retroactive impairment of these constitutionally vested rights by interpreting it as setting a final limitations period for the recovery of overburden reimbursement claims. Section 61, the Third Department held, extinguished the counties' remedy, not their substantive right to reimbursement. Notably, Respondents essentially concede that Section 61 was intended to provide a statute of limitations for reimbursement claims. 2 The Third Department held, however, that the limitations period forwarded by Respondents did not comport with procedural due process. Due process requires that a limitations period imposed on the exercise of a vested right run for a reasonable period after the effective date of the statute. Thus, in declaring Section 61 constitutional, the Third Department read it together with the purpose of Social Services Law§ 368-a to provide the counties with 100 percent overburden reimbursement, determined that the two provisions could be harmonized using settled principles of statutory interpretation, and exercised its discretion to impose a six- month grace period that applies to all counties throughout the state, including Petitioner here, running from November 26, 2014. The Third Department expressly reaffirmed this decision in Chemung. The Third Department's recent decisions in St. Lawrence Ill and Chemung are well- reasoned, well-supported resolution of the issues in the appeals between the counties and Respondents, are fully consistent with this Court's recent decision in County of Niagara and address Respondents' primary concern - an open-ended liability - by establishing a deadline by which the counties must submit their claims. This Court should therefore follow suit, and modify the lower court's decision to comport with the Third Department's decisions. Notably, the Third Department has expressly rejected Respondents' main argument on this appeal: that Petitioner lacks the right to challenge Section 61. Distilled to its essence, Respondents' argument challenges Petitioner's capacity, as a municipality, to seek to invalidate State legislation. Respondents, however, waived this argument by failing to assert it in their answer or otherwise raise it below. In any event, based upon the Third Department's prior holding in Matter of Krauskopf v Perales (139 AD2d 147 [3d Dept 1988]), Respondents' admissions in this proceeding, and the Third Department's decision in St. Lawrence Ill, there is no dispute that Petitioner has asserted a proprietary interest in a specific fund of money and, 3 therefore, one of the four exceptions to the general rule barring municipal challenges to State legislation is applicable. Thus, as a matter of law, Petitioner has capacity to bring this proceeding. Supreme Court's refusal to grant Petitioner mandamus relief compelling Respondents to identify, verify, and pay the total unpaid overburden expenditures that Petitioner incurred prior to January 1, 2006, however, runs directly contrary to the Third Department's decision in St. Lawrence III, and should be reversed. As the Third Department held, Social Services Law § 368-a, which was not explicitly or implicitly repealed by Section 61, contains a mandatory and ministerial statutory duty requiring Respondents to reimburse Petitioner for 100 percent of the overburden expenditures it made before January 1, 2006. Indeed, the Third Department, in Matter of County of St. Lawrence v Shah (95 AD3d 1548 [3d Dept 2012] ["St. Lawrence II']), unequivocally determined that Respondents cannot retroactively extinguish their overburden reimbursement duty to Petitioner, and reaffirmed that holding in St. Lawrence III. Thus, Supreme Court erroneously declined to compel Respondents to calculate and pay all unpaid overburden reimbursement owed to Petitioner in accordance with Social Services Law § 368-a. For these reasons and those set f01th more fully below, Petitioner respectfully requests that this Court modify and, as so modified, affirm the Supreme Comt judgment consistent with the Third Department's well-reasoned decisions in St. Lawrence III and Chemung. COUNTERSTATEMENT OF FACTS New York's Medical Assistance program makes Petitioner, and other counties throughout the state, responsible for providing Medical Assistance to eligible patients (Record on Appeal ["R"] 35-36). Although New York originally required the counties to pay fifty percent of Medical Assistance costs not covered by federal payments, commonly known as the counties' "local share,'' in the 1980s, the Legislature recognized that this policy would dramatically 4 increase the total Medical Assistance costs that the counties would incur (R 36). To mitigate this overwhehning burden, the Legislature eliminated the counties' obligation to pay a local share of the Medical Assistance costs and required Respondents to reimburse the counties for the local shares paid by the counties for Medical Assistance provided to certain indigent, mentally disabled persons (R 3 7). As part of this fiscal relief enactment, the Legislature amended Social Services Law § 368-a to add subdivision (1 )(h), which provides counties with full reimbursement for their local shares for this category of Medical Assistance recipients, known as "overburden" recipients (id.). Respondents, not the counties, were directly billed by the service providers for the costs of the Medical Assistance services rendered to the overburden recipients (see Matter of County of St. Lawrence v Daines, 81AD3d212, 218 [3d Dept 2011] ["St. Lawrence I"], lv denied 17 NY3d 703 [2011]). Since Respondents made payments directly to the providers, only Respondents could verify the costs. Without providing any verification of the costs, Respondents automatically collected the local shares from Petitioner, on a weekly basis, and deposited them into a special bank account maintained by the State Comptroller (R 326). In the mid-1990s, Respondents improperly changed the codes on the State-owned computer system for certain categories of individuals for whom the counties were not fiscally responsible, including overburden recipients (R 652-654, 658-667). Respondents admit that they, not Petitioner, were responsible for identifying and coding the overburden individuals (R 326). Furthermore, Respondents have never disputed that they were solely responsible for the failure to properly code these recipients on the state computer system nor have they provided an explanation as to how it happened (R 327-329, 659, 661-664, 672-673). As a result of the improper coding, Respondents failed to reimburse Petitioner and the other counties, and concealed their obligation to do so (see St. Lawrence I, 81 AD3d at 218). 5 As they did in St. Lawrence I, Respondents contend here that Petitioner could have discovered the improper coding by reviewing limited, pro forma statistical reports and other data that Respondents purportedly provided to Petitioner (Brief for Appellants ["Resps' Br."], at 5-6). The reports and data provided by Respondents, however, do not list or otherwise disclose which individuals Respondents improperly failed to code as overburden, or provide any other notice to Petitioner that certain individuals either had not been properly coded or had been decoded (R 328-331, 348, 664-673). Without receiving any notice of the improper coding from Respondents, there was no reason for Petitioner to suspect that overburden eligible individuals were missing from the State's computer system and the pro forma statistical reports. This is particularly true since Respondents destroyed records that would have assisted in identifying the uncoded overburden recipients (R 667-668), and have abjectly refused to turn over other relevant documents (R 151-214, 667-668). Absent Respondents' identification of the uncoded individuals and disclosure of the relevant records, it was impossible for Petitioner and the counties to identify the unpaid overburden reimbursement (R 663-665). In April 2005, Respondents took yet another step to avoid their unambiguous overburden reimbursement obligation. Without any notice to the counties, Respondents summarily ordered the Office of Temporary and Disability Assistance ("OTDA") to suspend any and all processing or payment of overburden reimbursements to the counties (R39, 654). Thus, even if Petitioner and the counties knew of the unpaid overburden reimbursement (which they did not) and could have identified any of the unpaid overburden reimbursement (which they could not), there would have been no means for them to recover the unpaid overburden reimbursement from Respondents. In sun1, Respondents have refused to voluntarily pay a single overburden reimbursement claim to any county since at least March 2005, if not earlier (as suggested by Respondents' litigation history and the record evidence) (R 654-656, 673-677). 6 The Medicaid Cap Statute In 2005, the Legislature adopted a "cap" methodology to limit, in subsequent calendar years, the total amouut of Medical Assistance expenses that the counties were required to pay to Medical Assistance-eligible patients in the fust instance (see L 2005, ch 58, pt C, § 1 [hereinafter, the "Medicaid Cap Statute"]). The basic principle of this cap methodology was to use 2005 as a base year for a county's total Medical Assistance expenditures, and to then guarantee that future expenditures did not increase unreasonably above that amount (see id. § 1 [b ]-[ d]). Notably, the Medicaid Cap Statute incorporated the overburden reimbursement obligation prospectively, effective January 1, 2006, while leaving it unchanged retrospectively (R 71-72). As such, after adoption of the Medicaid Cap, Respondents remained liable to reimburse the counties 100% of their local shares paid prior to January 1, 2006 on behalf of overburden- qualifying mentally disabled persons (id.). Related Prior Litigation In 2006, Respondents arbitrarily denied the counties' claims for overburden reimbursement, forcing those couuties to challenge Respondents' denial of reimbursement in a series of expensive lawsuits (R 71-73). In those litigations, Respondents initially argued thatthe counties' claims for overburden reimbursement were baned by the Medicaid Cap Statute (R 72). This Court properly rejected that argument, holding that the Legislature "did not intend [the Medicaid Cap Statute] to be retroactively applied" (Matter of County of Herkimer v Daines, 60 AD3d 1456, 1457 [4th Dept 2009], lv denied 13 NY3d 707 [2009]). Within days after this Court's decision, Respondents began denying overburden reimbursement claims on timeliness grounds, including on the basis that the claims allegedly were not submitted in accordance with the time requirements of 18 NYCRR § 601.3 (see Matter of County of Niagara v Daines, 79 7 AD3d 1702, 1705 [4th Dept 201 O], lv denied 82 AD3d 1719 [4th Dept 2011], lv denied l 7 NY3d 703 [2011]; St. Lawrence I, 81 AD3d at 216). This Court rejected both of these arguments, holding that the Medicaid Cap Statute only applies prospectively, and that Section 601.3 time limits do not apply to these reimbursement claims (County of Niagara v Daines, 79 AD3d at 1703, 1705; see also St. Lawrence I, 81 AD3d at 216-217). In St. Lawrence I, Respondents made, and the Third Department rejected, the identical argument as presented in this appeal; namely, Petitioner should have submitted the otherwise "stale" reimbursement claims earlier based upon the limited pro forma statistical reports allegedly provided by Respondents (compare R 329-331withR587-589). While these first two rounds of litigation were still pending, the Legislature, in 2010, amended the Medicaid Cap Statute to provide that "the state/local social services district relative percentages of the non-federal share of medical assistance expenditures incurred prior to Jari.uary 1, 2006 shall not be subject to adjustment on and after July 1, 2006" (L 2010, ch 109, part B, § 24). In effect, this amendment locked in a county's percentage share for the cost of Medicaid services at the figure calculated under the cap (R 40). In or around 2010, the counties again submitted overburden reimbursement claims to Respondents (id). Respondents denied those reimbursement claims, this time on the basis that the 2010 Amendment extinguished the counties' right to reimbursement (id.). As a result, the counties were forced to commence litigation to compel Respondents to make the reimbursements. After many courts throughout the state once again rejected Respondents' arguments, the Third Department in St. Lawrence II rejected Respondents' reliance on the 2010 Amendment (see St. Lawrence II, 95 AD3d at 1553-1554). In its decision, this Court cogently explained why Respondents could not retroactively avoid their statutory reimbursement obligation to the counties under Social Services Law § 368-a: 8 [I]t has been the state's statutory obligation to pay the county-share for Medicaid expenditures incurred in providing medical services to certain mentally disabled individuals. While the state, and not the county, has been obligated to pay for these medical services, it has continued to charge petitioner for these expenses and used these fimds to satisfy its obligations under this statute. Since the state was never entitled to these fonds, the 2010 amendment, even if found to apply to overburden expenditures, cannot serve to transform these county fimds into state property and relieve the state of the legal obligation to return them. , , . This Court has previously held that "prior to 2006, upon payment to DOH for services provided to overburdened patients for which no local share was owing, petitioner's right to reimbursement for such expenditures accrued" (Matter of St. Lawrence County v. Daines, 81 AD.3d at 216, 917 N.Y.S.2d 330). Thus, the 2010 amendment, even if it was intended by the Legislature to repeal Social Services Law§ 368-a (l)(h), cannot serve to relieve the state of its obligation to refund the counties for these expenditures made prior to January 1, 2006 (id [emphasis added]). This Court similarly rejected Respondents' arguments (see Matter of County of Niagara v Daines, 91 AD3d 1288, 1289 [4th Dept 2012], Iv denied 94 AD3d 1481 [4th Dept 2012]). Nevertheless, Respondents continued to reject claims on the basis of the 2010 Amendment until after the Third Department issued its decision in & Lawrence II (95 AD3d 1548 [3d Dept May 17, 2012]) (R 380, 676). The refusal by Respondents to reimburse the counties from 2006 to 2012 resulted in nine appellate decisions compelling Respondents to honor their statutory duty (see Matter of County of St. Lawrence v Shah, 95 AD3d 1548 [3d Dept 2012]; Matter of County a/Niagara v Daines, 91AD3d1288 [4th Dept 2012]; Matter of County of Erie v Daines, 96 AD3d 1432 [4th Dept 2012]; Matter of County of Herkimer v Daines, 83 AD3d1510 [4th Dept 2011]; Matter of County of Erie v Daines, 83 AD3d 1506 [4th Dept 2011]; Matter of County of St. Lawrence v Daines, 81 AD3d 212 [3d Dept 2011]; Matter of County of Niagara v Daines, 79 AD3d 1702 [4th Dept 2010]; Matter of County of Herkimer v Daines, 60 AD3d 1456 [4th Dept 2009]; Matter of County of Niagara v Daines, 60 AD3d 1460 [4th Dept 2009]). As is the case in the instant appeal, Respondents in the nine prior appellate cases did not dispute that the State had failed to reimburse the counties for overburden local share payments improperly taken prior to 9 2006. Notably, despite these decisions directing Respondents to reimburse the counties for certain overburden recipients, Respondents have to date abjectly failed to correct the coding for these recipients, in apparent defiance of a number of comt orders, including Supreme Court, Niagara County's order in Matter of County of Niagara v Daines -(Sup Ct, Niagara County, Kloch, Sr., J., Feb. 18, 2010, Index No. 137680) (R 660-665). The undisputed and intentional refusal to properly code individuals to date has allowed and will continue to allow Respondents to reap enormous windfalls (beyond the admitted windfall of refusing to reimburse for pre-2006 payments at issue in this and prior litigations) at the expense of Petitioner and the counties (R 665-667). Section 61 of the 2012 Executive Budget Law After all of Respondents' prior legal arguments to avoid the State's undisputed debt to the counties failed, Respondents resorted to a new tactic-asking the Legislature to pass an unambiguously retroactive statute in an attempt to extinguish permanently the counties' vested rights to reimbursement, despite the Third Department's express warning in St. Lawrence II that Respondents could not do so (R 41-42). Section 61 expressly provides that "[n]otwithstanding the provisions of section 3 68-a of the social services law or any other contrary provision of law, no reimbursement shall be made for social services districts' claims submitted on and after the effective date of this paragraph, for district expenditures inc]JITed prior to January 1, 2006'; (R 148). Section 61 was introduced to the Legislature on January 17, 2012 and becan1e effective upon its enactment on April 1, 2012 (Resps' Br., at 9; see also R 148, 336-337). At the time Section 61 was introduced, therefore, Respondents still were rejecting overburden claims based upon the 2010 Amendment (R 336-337, 381). Respondents' suggestion that they voluntarily paid overburden claims between the introduction of Section 61 and its enactment, a purported 10 due process grace period (Resps' Br., at 31, 36), therefore, is patently false (R 381, 676-679). Thus, no grace or limitations period was afforded to the counties to allow them to identify and seek unpaid overburden reimbursement (R 42). Recent Overburden Claims Submitted On or about November 27, 2013, December 9, 2013, January 27, 2014, and March 13, 2014, Petitioner submitted claims for overburden reimbursement to Respondents in the total amount of $4,713,748.94 (R 1015-1016). By form letters, Respondents denied those claims in their entirety, based solely on the retroactive application of Section 61 (R 229-232, 1016). Thus, Respondents' actions once again left Petitioner with no alternative but to challenge the deprivation of its reimbursement rights in the courts. The Supreme Court Order On June 24, 2014, Supreme Court, Momoe County (Polito, J.) issued a Decision and Order declaring Section 61 of the 2012 Executive Budget unconstitutional, annulling the determination of Respondents to deny Petitioner's claims for overburden reimbursement, and directing Respondents to pay Petitioner's claims in the total amount of $4,713,748.94 (R 18-21). Supreme Court, however, denied Petitioner's request for mandamus relief compelling Respondents to calculate and pay Petitioner for the total remaining overburden reimbursements owed (R 20-21). Respondents and Petitioner cross-appealed·from the Supreme Court order (R 4- 5, 9-10). Contrary to Respondents' characterization of the Supreme Court order, the Court did not apply the special facts exception to preclude Respondents from relying on Section 61 to deny Petitioner's claims for reimbursement. In any event, Petitioner acknowledges that this Court and the Third Department have held that the special facts exception does not apply in the circumstances presented here. 11 ARGUMENT POINT I PETITIONER HAS CAP A CITY TO CHALLENGE SECTION 61 Respondents assert that Petitioner, as a subdivision of the State, is not a "person" with due process rights vis-a-vis the State, and thus can never have a remedy with respect to the overburden reimbursement owed under Social Services Law§ 368-a, which they claim has been repealed by implication (Resps' Br., at 22-27). This new argument fails for three reasons. First, despite Respondents' rnischaracterization of this argument as relating to the merits of Petitioner's vested rights and due process claims, the ability of a municipality to assert constitutional claims against the State is an issue of capacity to sue. The Third Department in St. Lawrence Ill explicitly confirmed this principle, holding "despite respondents' argument to the contrary, their assertion that petitioner, as a political subdivision of the state, can have no due process clain1 against its creator, is essentially a challenge to petitioner's capacity" (St. Lawrence Ill, 124 AD3d at 91). This Court seemingly reached the same conclusion in its recent County of Niagara decision when it remitted to the lower court the issue of whether Respondents waived the capacity defense. Respondents, here, however, waived capacity as a defense by failing to plead it in their Verified Answer. Second, even if the failure to raise capacity as an affinnative defense could be ignored, Respondents' new argument was not raised before Supreme Court below, thereby denying Petitioner the opportunity to contest it on the facts and law. Thus, the argument is unpreserved for appellate review and should not be considered by this Court. Finally, even if this argument were not indisputably waived and unpreserved, it fails as a matter of law because it is well established that a municipality may assert constitutional claims against the State when, as here, it does so in its proprietary, as opposed to govermnental, capacity. In fact, Respondents have 12 conceded that if the issue is one of capacity, Petitioner's claims are not barred. (Resps' Br., at 25). To preclude Petitioner from seeking judicial review of the Legislature's attempt to "wall off' Respondents' prior undisputed obligations to Petitioner, as Respondents would have it, merely because Petitioner is a political subdivision is contrary to law and would impermissibly afford the State unbridled authority to legislate away its debts whenever it no longer desired to pay them. Thus, this Court should flatly reject Respondents' waived and unpreserved argument that Petitioner lacks capacity to challenge the unconstitutional deprivation of its vested and due process rights, as did the Third Department. A. Respondents Challenge Petitioner's Capacity to Bring this Proceeding. Respondents contend that Petitioner's due process and vested rights claims fail because Petitioner, as a political subdivision of the State, can never assert a due process or vested rights claim against the State (Resps' Br., at 22-27). Contrary to Respondents' mischaracterization of this argument, it is beyond cavil that the ability of a municipality to bring constitutional claims against the State is an issue of capacity to sue, which must be raised as an affirmative defense. Respondents' argument to the contrary is, at best, a fundamental misstatement of the law. In addition to being directly controverted by the legion of cases in which New York courts have uniformly treated this issue as one of capacity to sue, Respondents' argument also must fail because the law is clear that municipalities are entitled to due process of law under the New York State Constitution, and have capacity to assert those rights against the State when acting in a proprietary capacity. The general rule is that "municipalities and other local governmental corporate entities and their officers lack capacity to mount constitutional challenges to acts of the State and State legislation" (City of New Yorkv State of New York, 86 NY2d 286, 289 [1995] [emphasis added]). 13 Capacity, however, is a threshold issue that "concerns a litigant's power to appear and bring its grievance before the court" (New York Blue Line Council v Adirondack Park Agency, 86 AD3d 756, 758 [3d Dept 2011], app dismissed 17 NY3d 947 [2011], lv denied 18 NY3d 806 [2012], quoting Matter of Graziano v County of Albany, 3 NY3d 475, 478-479 [2004] [internal quotation marks and citation omitted]), and does not speak to the merit of the underlying claim. It is well settled that there are four exceptions to the general rule that a municipality does not have capacity to sue the State. One of the exceptions applies where, as here, the State legislation adversely affects a municipality's proprietary interest in a specific fund of moneys (City of New York, 86 NY2d at 291-292; see also County of Rensselaer v Regan, 173 AD2d 37, 40 [3d Dept 1991], affd 80 NY2d 988 [1992]; Matter of Town of Moreau v County of Saratoga, 142 AD2d 864, 865 [3d Dept 1988]). The very existence of these exceptions to the capacity general rule, which are articulated in the only New York decision cited by Respondents (see Jeter v Ellenville Cent. School Dist., 41NY2d283 [1977]), undermines Respondents' contention that a municipality is incapable of asserting a due process/vested rights claim against the State as a matter of substance. Indeed, RespondentS' near exclusive reliance on federal law under the Fourteenth Amendment is inapposite, as Petitioner has pled a due process claim solely under the New York Constitution (R 50-53, 1024-1027). Respondents nonetheless conflate the threshold rule cited above with the merits of Petitioner's constitutional claims. Respondents' argument is based entirely upon the line of cases that the Court of Appeals in City of New York comprehensively collected, discussed, and explicitly held to be limited to the waivable issue of capacity to sue (see City of New York, 86 NY2d at 289-290 [collecting and discussing cases] ["Viewed, therefore, by the courts as purely creatures or agents of the State, it followed that municipal corporate bodies cannot have the right to contest the actions of their principal or creator affecting them in their governmental capacity 14 or as representatives of their inhabitants" (emphasis added)]). In fact, the main decision on which Respondents rely (see Resps' Br., at 26-27, citing Jeter, 41 NY2d at 287) cites the same line of cases, all of which note the distinction between a municipality's governmental and proprietary functions. For example, the Court of Appeals in Jeter cited Matter of County of Cayuga v McHugh (4 NY2d 609 [1958]) in support of its holding that the municipalities could not raise "these constitutional challenges" (Jeter, 41 NY2d at 287). In County of Cayuga, the Court of Appeals held that Cayuga County could not raise a due process challenge to a determination closing a jail because the determination did not "deprive the county of any property rights" (County a/Cayuga, 4 NY2d at 616). The courts of this State, including the Third Department in St. Lawrence III and Chemung, have uniformly treated this issue as one of capacity to sue and contemporaneously acknowledged that a municipality has substantive due process and other constitutional rights against the State that may be asserted under one of the four enumerated exceptions to the general rule (see City of New York, 86 NY2d at 291-292). Notably, this includes decisions specifically addressing a municipality's right to bring a due process claim against the State seeking to invalidate an act of the Legislature (see Village of Herkimer v Axelrod, 58 NY2d 1069, 1071 [1983] [treating State's challenge to political subdivision's due process claim as a capacity/standing defense]; Gulotta v State, 228 AD2d 555, 556 [2d Dept 1996] [holding that municipalities lacked capacity to assert due process and equal protection claims because none of the four exceptions to the general rule applied], citing Jeter, 41 NY2d at 287; City of New York v Lawton, 128 AD2d 202, 206 [3d Dept 1987]; Herzog v Board of Educ. of Lawrence Union Free School Dist., 171 Misc 2d 22, 26-27 [Sup Ct, Nassau County 1996] [holding that municipality lacked capacity to bring a due process claim]). That Respondents are, in fact, raising capacity was most recently affirmed by the Third 15 Department in Matter of County of Nassau v State of New York (100 AD3d 1052 [3d Dept 2012], lv dismissed 20 NY3d 1092 [2013]). There, the Third Department held that the County lacked the legal capacity to challenge the constitutionality of a statute because "municipal entities generally 'cannot have the right to contest the actions of their principal or creator affecting them in their governmental capacity or as representatives of their inhabitants'" (id at 1054-1055 [emphasis added], quoting City of New York, 86 NY2d at 290). Notably, the Third Department explicitly based its determination upon a finding that none of the four exceptions to the general incapacity rule applied (id., citing, inter alia, Jeter, 41 NY2d at 287). Where, as here, one of the enumerated exceptions to the general threshold capacity rule applies, Respondents essentially concede that a municipality may bring a constitutional claim against the State (see Resps' Br., at 25). For example, in Purcell v Regan (126 AD2d 849 [3d Dept 1987], lv denied 69 NY2d 613 [1987]), the Third Department held that the County of Nass au could challenge a state statute on constitutional grounds because it did not do so in its govermnental capacity (id. at 850). Similarly, in Matter of City of New York v Lawton (128 AD2d 202 [3d Dept 1987]), the Third Department held that a municipality had capacity to assert a constitutional claim against the State because it claimed "entitlement to a specific fund" and, therefore, was asserting its proprietary, as opposed to governmental, rights (id. at 206). In short, Respondents' suggestion that a municipality may never bring a due process or vested rights claim against the State is a fundamental misstatement of the law (see e.g. Matter of Crespo, 123 Misc 2d 862, 866 [Sup Ct, New York County 1984]; Rivera v Laporte, 120 Misc 2d 733, 740 [Sup Ct, New York County 1983]; see also e.g. Township of River Vale v Town of Orangetown, 403 F2d 684, 686 [2d Cir 1968]). Rather, a municipality's ability to assert due process and vested rights claims against the State is a threshold issue of capacity (see Gulotta, 228 AD2d at 556). Respondents' new argument on appeal ignores the well-settled rule that a 16 municipality may challenge the constitutionality of a statute in its proprietary, as opposed to governmental, capacity, and therefore should be rejected by this Court. B. Respondents Waived the Capacity Defense. It cannot be disputed that lack of capacity is an affirmative defense that is waived if it is not pled in an answer or otherwise raised by motion (see CPLR 3211[a][3], [e]; City of New York v State of New York, 86 NY2d at 292; see also Town of Delhi v Telian, 119 AD3d 1049, 1050 [3d Dept 2014]; Andrews, Pusateri, Brandt, Shoemaker & Roberson, P.C v Niagara County Sewer Dist. No. 1, 71AD3d1374, 1375 [4th Dept 2010]). In fact, the Third Department recently confirmed this well-established principle in both St. Lawrence III and Chemung (see Chemung, 2015 NY Slip Op 00267, at * 1 ["Respondents' challenge to petitioner's capacity to bring this claim was waived by respondents' failnre to raise capacity as a defense in their answer or a pre- answer motion to dismiss"]; St. Lawrence III, 124 AD3d at 91 ). Here, as in St. Lawrence III and Chemung, Respondents failed to plead lack of capacity in their Verified Answer (R 314-315). Thus, Respondents have waived their lack of capacity argnrnent, and this Cou1t should decline to consider it (see Town of Delhi, 119 AD3d at 1050 ["inasmuch as defendant can no longer raise the issue of plaintiffs capacity to sue in this action (due to waiver), plaintiffs arguments regarding its capacity have been rendered academic, and we decline to address them"]). In an attempt to avoid their clear waiver, Respondents rely solely on the reference by the Court of Appeals in Jeter to a municipality's '"substantive right'" to raise a due process challenge (Resps' Br., at 27, quoting Jeter, 41 NY2d at 287). The Court's reference in Jeter to the "substantive right" to sue, however, is a precise reference to the municipality's legal capacity to sue, as conclusively indicated by the Court's statement-in the subsequent sentence-that the municipalities did not have the "substantive" right to sue because none of the recognized exceptions to the capacity rule applied (Jeter, 41 NY2d at 287). In contrast, one of the 17 recognized exceptions indisputably applies here and, therefore, Respondents' reliance on Jeter is inapposite. Thus, as the Third Department held in St. Lawrence III, Respondents' argument is in fact a baseless capacity defense that they plainly waived by failing to assert it as an affirmative defense in their answer (see City of New York, 86 NY2d at 292). Even if Respondents had not waived their lack of capacity argument, their failure to raise it before Supreme Couit at any time during the proceedings below renders it unpreserved for appellate review (see Stiver v Good & Fair Carting & Moving, Inc., 32 AD3d 1209, 1211 [4th Dept 2006], ajfd 9 NY3d 253 [2007]; Ring v Jones, 13 AD3d 1078, 1079 [4th Dept 2004]). Thus, Respondents should not be permitted to raise their unpreserved argument here, and this Court should decline to consider it. C. Petitioner has Capacity to Challenge Section 61 as a Matter of Law. Even ignoring Respondents' waiver and failure to preserve their capacity argument, it cannot be disputed that Petitioner fits within the long-standing exception that a political subdivision has capacity to challenge State legislation where "the State legislation adversely affects a municipality's proprietary interest in a specific fund of moneys" (City of New York, 86 NY2d at 291-292). The key factor in determining the existence of a specific fund for purposes of this exception is whether the monies have already been collected by the State, which has indisputably occurred here (see County of Rensselaer v Regan, 173 AD2d 37 [3d Dept 1991], affd 80 NY2d 988 [1992]). In County of Rensselaer, the Third Department notably held that the counties had capacity to sue "because they [were] asserting a proprietary claim of entitlement to a specific fund, namely, their entitlement to receive all of the fines, forfeitures and penalties collected by the courts in proceedings on the offenses specified in the STOP-DWI legislation" (id. at 40 [emphasis added]). Here, Petitioner's proprietary right is even more concrete because Respondents admit that 18 DOH took Petitioner's money (the local share payments) and placed that money into "a special bank account maintained by the State Comptroller" (R 326). It is in that specific fund in which Petitioner has a proprietary interest, and from which Petitioner's overburden reimbursement should have been paid. Thus, Respondents' admission alone is dispositive of Petitioner's capacity to challenge the retroactive deprivation of Petitioner's vested overburden reimbursement rights. In any event, the Third Department already has held that municipalities have a property interest in the overburden funds collected by the State. Specifically, in Matter of Krauskopf v Perales (139 AD2d 147 [3d Dept 1988], affd 74 NY2d 730 [1989]), the Third Department held that the overburden local shares paid by social services districts and held by Respondents constitute a specific fund within the meaning of the exception to the general incapacity rule (id at 153). The Third Department's decision, addressing a local social services district's proprietary interest in the State's specific fund for overburden reimbursement, is directly on point here, and Respondents concede as much. (Resps' Br., at 25). This Court should thus follow the Third Department's guidance and reject Respondents' challenge to Petitioner's capacity. POINT II SECTION 61 IS ONLY CONSTITUTIONAL IF CONSTRUED AS A LIMITATIONS PERIOD FOR THE RECOVERY OF OVERBURDEN REIMBURSEMENT A. This Court Should Adopt the Third Department's Interpretation of Section 61. It is well settled that where, as here, two statutory provisions relate to the same subject matter, they must be construed together to effectuate the statutory purposes of each (see Alweis v Evans, 69 NY2d 199, 204 [1987]; see also Matter of Albany Law School v New York State Off of Mental Retardation & Dev. Disabilities, 19 NY3d 106, 121 [2012] ["Statutes that relate to the 19 same subject are in pari materia and should be construed together unless a contrary intent is clearly expressed by the Legislature." (internal quotation marks omitted)]; St. Lawrence II, 95 AD3d at 1552). Indeed, "[t]he repeal of a statute by implication is not favored by law, for when the legislature intends to repeal an act it usually says so expressly" (Pines v State of New York, 115 AD3d 80, 97-98 [2d Dept 2014], appeal dismissed 23 NY3d 982 [2014], quoting Matter of Tiffany, 179 NY 455, 457 [1904]). "The absence of an express provision in a later statute, for repeal of an earlier one, gives rise to a presumption that repeal was not intended" (Cimo v State of New York, 306 NY 143, 148-49 [1953]). "If by any fair construction, both statutes can be given operation, implied repeal will not be declared" (Pines, 115 AD3d at 98, quoting Cimo, 306 NY at 149). Thus, a statute cannot be "deemed impliedly modified by a later enactment unless the two are in such conflict that both cannot be given effect. If by any fair construction, a reasonable field of operation can be found for [both] statutes, that construction should be adopted" (Matter of Consolidated Edison Co. of NY. v Department of Envtl. Conservation, 71 NY2d 186, 195 [1988] [internal quotation marks omitted]). As the Third Department held in St. Lawrence III, Social Services Law § 3 68-a and Section 61 may be read together and applied harmoniously to effectuate the purposes of each. Social Services Law § 3 68-a unambiguously entitles Petitioner to 100 percent reimbursement for all overburden local share payments made prior to January 1, 2006 (see Social Services Law § 368-a[l][h][i] ["There shall be paid to each such district ... Beginning January first, nineteen hundred eighty-four, one hundred per centum of the amount expended for medical assistance for those individuals who are eligible pursuant to section three hundred sixty-six of this article as a result of a mental disability . . . after first deducting therefrom any federal funds properly received or to be received on account thereof." (emphasis added)]). Petitioner's right to reimbursement vested when Petitioner paid its overburden local share to the State prior to 20 January 1, 2006 (see St. Lawrence II, 95 AD3d at 1553-1554 ["Since the state was never entitled to these funds, the 2010 amendment, even if found to apply to overburden expenditures, [could not] serve to transform these county fimds into state property and relieve the state of the legal obligation to return them" (emphasis added)]; St. Lawrence I, 81 AD3d at 216 ["petitioner's right to reimbursement for [Medical Assistance] expenditures accrued' "prior to 2006, upon payment to DOH for services provided to overburdened patients for which no local share was owing" (emphasis added)]). Section 61 does not explicitly or implicitly repeal any part of Social Services Law§ 368- a. Had the Legislature intended to eliminate Respondents' reimbursement obligation entirely, it would have repealed that provision, or used language that expressly eliminated all overburden reimbursement (see Alweis, 69 NY2d at 204 ["Obviously, the judiciary should not lightly infer that the Legislature has repealed one of its own enactments when it has failed to do so expressly; the Legislature is hardly reticent to repeal statutes when it means to do so."]). It chose not to do so, however. Instead, as the Third Department held, the intent of Section 61 was to provide the State with financial certainty by imposing a statute oflimitations on the payment of Petitioner's claims for overburden reimbursement (see St. Lawrence III, 124 AD3d at 92 ["The 20i2 amendment did not specifically repeal any part of Social Services Law § 368-a or affect the counties' inherent right to reimbursement. Rather, the amendment simply imposed a statute of limitations for the payment of claims for such reimbursement."]). Notably, Respondents concede that a statute of limitations for reimbursement claims was intended (Resps' Br., at 30- 32). As so construed, Section 61 does not impair Petitioner's unquestionably vested right under Social Services Law § 368-a, but only extinguishes the remedy through which Petitioner may enforce that right (see Matter of Paver & Wildfoerster [Catholic High School Assn.], 38 21 NY2d 669, 676 [1976] ["it has been said long ago and many times since that the Statute of Limitations only bars the remedy; it does not impair the underlying right"]). Thus, the Third Department's interpretation of Section 61 is consistent with the construction expressly intended by the Legislature---that it "shall not be construed to alter, change, affect, impair or defeat any rights, obligations, duties or interests accrued, incurred or conferred prior to the effective date of this act" (L 2012, ch 56, part D, § 65[k:]). Significantly, the Third Department's decision comports with the prior decision in County of Niagara v Daines, where this Court rejected Respondents' construction of the 2010 Amendment to "defeat[ ] their preexisting duty to reimburse petitioner for the overburden expenditures" because this precise language unambiguously preserved Petitioner's preexisting rights (County of Niagara v Daines, 91 AD3d at 1289; see also Matter of Monroe County Pub. School Dists. v Zyra, 51AD3d125, 131 [4th Dept 2008] ["the rules of statutory construction require that we avoid rendering statutory language superfluous"], lv denied 52 AD3d 1293 [4th Dept 2008]). Contrary to Respondents' attempt to manufacture a conflict, the Third Department's construction of Section 61 is also consistent with this Court's recent holding in Matter of County of Niagara v Shah (122 AD3d 1240 [4th Dept Nov. 14, 2014]). As in St. Lawrence III, in County of Niagara v Shah, this Court held that "section 61 has retroactively changed the law" by extinguishing "petitioner's right to submit claims for reimbm:sement of overburden expenditures made prior to 2006"-i.e., the remedy through which Petitioner could recover the reimbursemerit owed pursuant to Social Services Law § 368-a (id. at 1242 [emphasis added]). This Court rejected Supreme Court, Niagara County's interpretation of Section 61 because it would have nullified the Legislature's intended effect. The Court's Niagara decision does not conflict with the Third Department's order granting mandamus to compel Respondents to satisfy their unambiguous statutory 22 reimbursement duty under Social Services Law § 368-a to identify and pay the total outstanding overburden liability, as Respondents claim. This Court in County of Niagara reversed Supreme Court, Niagara County's decision granting the county mandamus relief based upon an inappropriate application of the special facts exception. Because this Court held, as did the Third Department, that the special facts exception does not apply, this Court's decision was limited to a holding that granting mandamus relief based on the law existing before and without regard for Section 61 was improper (see id. at 1242-1243). Contrary to Respondents' argument, however, this Court did not hold that Section 61 repealed Respondents' reimbursement obligation under Social Services Law § 368-a in its entirety or finally determine that mandamus relief can never be granted. Instead, this Court merely rejected an alternative interpretation of Section 61 that would have rendered it a nullity and remitted the matter to Supreme Court, Niagara County for consideration of the constitutionality of the Section 61 (see id. at 1244). The Third Department's interpretation, however, resolves this Court's concern. Construed as a statute of limitations eliminating Petitioner's remedy for recovery of overburden reimbursements, Section 61 can be given its intended effect to close the books on pre-2006 overburden reimbursement claims, as this Court recognized, while also preserving the legislative intent of Social Services Law§ 368-a to provide 100 percent reimbursement to Petitioner and the other counties. Construed otherwise, Section 61 can only be read to extinguish Petitioner's vested rights to overburden reimbursement retroactively, contrary to the intent of the Legislature and in violation of the Constitution. Thus, it is this Court's duty, as it was the Third Department's, to construe Section 61 in the only manner that will preserve its constitutionality, as imposing a final limitations period for the recovery of the overburden reimbursement unambiguously provided under Social Services Law § 368-a (see Loretto v Teleprompter Manhattan CATV C01p., 58 NY2d 143, 149 [1983] ["the section is to be construed so as to 23 sustain its constitutionality ... if possible"]; H. Kauffinan & Sons Saddlery Co. v Miller, 298 NY 38, 44 [1948] ["Where the language ofa statute is susceptible of two constructions, the [courts] will adopt that which avoids injustice, hardship, constitutional doubts or other objectionable results."]). As the Third Department held, however, the limitations period imposed cannot run for the two and a half-month period from the date that Section 61 was introduced to its effective date, as Respondents suggest. Indeed, the Court of Appeals has already rejected Respondents' exact argument, holding that the time period between legislation's passage and effective date cannot serve as a grace period to satisfy the strictures of due process (see Gilbert v Ackerman, 159 NY 118, 123-124 [1899]). In order to provide constitutionally adequate due process before a retroactive deprivation of Petitioner's vested rights to overburden reimbursement, Section 61 was required, at the very least, to provide a reasonable grace or limitations period for submission of claims after it became effective (see Brothers v Florence, 95 NY2d 290, 301 [2000] ["Where, as here, however, there is no legislatively prescribed grace period, a court may uphold the constitutional validity of the retrospective application of the new statute by interpreting it as authorizing suits upon otherwise time-barred claims within a reasonable time after the statute's effective date" (emphasis added)]; Roman Catholic Diocese of Albany, NY. v New York State Workers' Compensation Bd., 96 AD3d 1288, 1290 [3d Dept,2012] ["With respect to legislation that is 'retroactive' in the sense that it shortens a limitations period for claims that accrued prior to the statute's effective date, due process is satisfied when the Legislature expressly sets a reasonable grace period" (internal quotation marks and citation omitted)]). Section 61 did no such thing. Instead, it barred Petitioner's claims for reimbursement immediately when it became effective, without any grace period at all. Because Section 61 did not provide a grace period for the final submission of overburden 24 reimbursement claims, the Third Department exercised its discretion and determined that a six- month limitations period running from the date of its decision - November 26, 2014 - was warranted in order to preserve the statute's constitutionality (see id. ["Where, as here, however, there is no legislatively prescribed grace period, a court may uphold the constitutional validity of the retrospective application of the new statute by interpreting it as authorizing suits upon otherwise time-barred claims within a reasonable time after the statute's effective date."]). As the Third Department recognized, a grace period generally applicable to all counties across the state, ·including Petitioner here, was preferable in order to avoid what would otherwise be an unpredictable scheme of different periods running for each county in the state (see St. Lawrence III, 124 AD3d at 93). The Third Department's decision provides substantial justice for the counties, while also giving the State the financial certainty it sought through Section 61 particularly by virtue of a truncated grace period. Therefore, this Court should modify and, as so modified, affirm the Supreme Court order consistent with the Third Department's decision in St. Lawrence III. B. Respondents' Interpretation of Section 61 Violates General Construction Law § 93. As the Third Department held in St. Lawrence II, General Construction Law § 93 protects Petitioner's right to reimbursement for overburden local share payments taken prior to 2006, notwithstanding the State's attempts to legislate away that right (see St. Lawrence II, 95 AD3d at 1553-1554). This is especially true here, where Respondents assert that Section 61 effectively repeals Social Services Law § 368-a's reimbursement obligation for those payments, notwithstanding that Petitioner's rights under that statute vested long before the enactment of Section 61 (see General Construction Law § 93 ["The repeal of a statute or part thereof shall not affect or impair any ... right accruing, accrued or acquired ... prior to the time such repeal takes effect'']; St. Lawrence II, 95 AD3d at 1553-1554; St. Lawrence I, 81 AD3d at 216; County of 25 Herkimer v Daines, 60 AD3d at 1457). Because Petitioner's right to reimbursement vested long before Section 61 was enacted to purportedly extinguish the reimbursement remedy, and is protected by General Construction Law § 93, this Court should reject Respondents' interpretation of Section 61. Application of General Construction Law § 93 is especially appropriate in this case because Respondents argue that Section 61 repeals the entire reimbursement obligation contained in Social Services Law § 368-a by implication. It cannot be disputed that Respondents' interpretation of Section 61, if adopted, would have wide-ranging repercussions on Petitioner's vested rights to reimbursement. Under Respondents' impermissibly expansive view, Petitioner would be deprived of reimbursement for all pre-2006 overburden payments talcen by Respondents, simply because Respondents unlawfully failed to comply with their statutory reimbursement duty in the first instance and now do not wish to pay (R 336-337). This Court can avoid that impermissible result, and satisfy the directive of General Construction Law § 93, however, by adopting the Third Department's reasonable interpretation of the plain language cif Section 61-that Section 61 operates as a statute of limitations the expiration of which bars Petitioner's remedy for recovery under its vested rights to overburden reimbursement. In so doing, Petitioner's vested rights to the overburden reimbursements are preserved, the purpose of General Construction Law § 93 is satisfied, and Section 61 is given its intended effect. As the Third Department held in St. Lawrence II, and again in St. Lawrence III, this Court should construe Section 61 to prevent the State from unilaterally legislating away its undisputed reimbursement debt to Petitioner without first satisfying the demands of due process (see St. Lawrence Ill, 124 AD3d at 92-93; St. Lawrence II, 95 AD3d at 1553-1554). POINT III SECTION 61 IS UNCONSTITUTIONAL BECAUSE IT RETROACTIVELY DEPRIVES 26 PETITIONER OF ITS VESTED RIGHT TO REIMBURSEMENT Should this Court decline to interpret Section 61 as a limitations period consistent with the Third Department's decision, the Supreme Court order should be affirmed, because Section 61 retroactively deprives Petitioner of its vested right to overburden reimbursement. Respondents argue that the Legislature is permitted to extinguish Petitioner's vested right to overburden reimbursement retroactively because the balance of factors articulated by the Court of Appeals in Alliance of Am. Insurers v Chu (77 NY2d 573, 585-586 [1991]) to determine whether vested rights may be impaired by retroactive legislation "decisively" tips in their favor (Resps' Br., at 28). Respondents are mistaken. As the Third Department expressly cautioned in St. Lawrence II, Petitioners' vested rights to reimbursement canoot be abrogated retroactively, even if legislation does so expressly (see St. Lawrence II, 95 AD3d at 1553-1554). That the Third Department's conclusion with respect to Respondents' interpretation of the 2010 Amendment was made in dictum does not undermine its rationale. Indeed, Respondents take the same position here that they did in the prior cases before this Court and the Third Department- that a retroactive statute extinguishes the State's undisputed reimbursement debt (see id.; see also County of Niagara v Daines, 91 AD3d at 1288-1289). Thus, no basis exists to impugn the Third Department's rationale in St. Lawrence II that a retroactive enactment, such as Section 61, cannot extinguish Petitioner's vested rights to overburden reimbursement. A. Section 61 Unconstitutionally Deprives Petitioner of its Vested Property Right to Reimbursement. Section 61 is an unambiguously retroactive law, and should be viewed with skepticism (see e.g. Matter of Chrysler Props. v Morris, 23 NY2d 515, 521 [1969]). As aptly restated by the Court of Appeals, "[flor centuries our law has harbored a singular distrust of retroactive statutes" (James Sq. Assoc. LP v Mullen, 21 NY3d 233, 246 [2013] [internal quotation marks and 27 citation omitted]). Respondents do not dispute that the Legislature's authority to enact retroactive laws is substantially constrained (see Alliance, 77 NY2d at 585-586). Nor do they dispute that where, as here, a statute retroactively impairs vested rights, a rational basis for the law simply is not enough to sustain it (id at 586; see Matter qf Hodes v Axelrod, 70 NY2d 364, 369-370 [1987]; Franza v Olin, 73 AD3d 44, 46 [4th Dept 2010]). "This doctrine reflects the deeply rooted principles that persons should be able to rely on the law as it exists and plan their conduct accordingly and that the legal rights and obligations that attach to completed transactions should not be disturbed" (Alliance, 77 NY2d at 586). Indeed, "[t]he integrity of the State government, upon which the public is entitled to rely, requires, at the very least, that the State keep its lawfully enacted promises" (id at 577). This Court and the Third Department have previously concluded that Petitioner's right to reimbursement for overburden local share payments is a vested right. In County of Herkimer v Daines (60 AD3d 1456 [4th Dept 2009]), for example, this Court acknowledged that "petitioner had rendered services in accordance with the law in existence at the time, and those transactions were complete" (id at 1457). This Court also, in County of Niagara v Daines, explicitly held that the 2010 Amendment could not be construed to defeat Respondents' "preexisting duty to reimburse petitioner for the overburden expenditures" because the statute, like Chapter 56, pait D of the 2012 Executive Budget Bill here, '"shall not be construed to alter, change, affect, impair or defeat any rights, obligations, duties or interests accrued, incurred or conferred prior to the effective date of this act'" (County of Niagara v Daines, 91 AD3d at 1289, quoting L 2010, ch 109, pait B, § 40[c]; see also L 2012, ch 56, pait D, § 65[k] [using precisely the san1e language to preserve vested rights]; St. Lawrence II, 95 AD3d at 1553 ["(s)ince the state was never entitled to these funds, the 2010 amendment, even if found to apply to overburden expenditures, [could not] serve to transform these county funds into state property and relieve the state of the legal 28 obligation to return them" (emphasis added)]). Similarly, in St. Lawrence I, the Third Department explained that "petitioner's right to reimbursement for (Medical Assistance) expenditures accrued' "prior to 2006, upon payment to DOH for services provided to overburdened patients for which no local share was owing" (St. Lawrence I, 81 AD3d at 216 [emphasis added]). This Court relied on St. Lawrence I when it held that the State's retroactive application of an amendment to the Empire Zone Act violated the plaintiffs due process rights (see James Sq. Assoc. LP v Mullen, 91 AD3d 164, 172 [4th Dept 2011], affd 21 NY3d 233 [2013]). Thus, at a minimum, this Conrt has interpreted St. Lawrence I as establishing a county's constitutionally protected right in pre-2006 overburden reimbursement (see People v ME., 121 AD3d 157, 160 [4th Dept 2014] [citing Matter of County of Herkimer v Daines (60 AD3d 1456, 1457 [4th Dept 2009], Iv denied 13 NY3d 707 [2009]) in discussion regarding improper retroactive statutes]). Social Services Law § 368-a(l)(h) provides Petitioner with an immediate property interest in the reimbursement owed by Respondents. Section 61 now purports to retroactively deprive Petitioner of these reimbursements. Just as this Conrt and the Third Department have held with respect to the 2010 Amendment, however, Section 61 cannot now "transform these county funds into state property and relieve the state of the legal obligation to return them," because the State "was never entitled to these funds" in the first place (St. Lawrence II, 95 AD3d at 1553 [emphasis added]). Accordingly, Respondents' reliance on Section 61 to deprive Petitioner retroactively of its vested right to reimbursement must fail (see id.). Additionally, numerous courts throughout the State have recently held just that, including the Supreme Courts in Broome County, Cayuga County, Chautauqua County, Chemung County, Delaware County, Genesee County, Jefferson County, Oneida County, Orleans County, Schuyler County, and St. Lawrence County (see Addendum). New Yark precedent fully supports these 29 courts' recent holdings, as New York courts consistently uphold vested rights against retroactive abrogation in circumstances similar to this case. For example, in Alliance, the Court of Appeals invalidated an amendment to the Insurance Law because the amendment retroactively deprived the plaintiffs-a number of insurance companies, trade associations, and individual insurance policy holders--of their constitutionally protected "property rights" in the earnings of a statutorily-created Property and Liability Insurance Security Fund to which they had previously contributed (77 NY2d at 577-578). Specifically, the Court held that, with respect to "contributions already made," the State could not extinguish the contributors' property rights by "repealing the provision which [gave J rise to [them]" (id at 585). Respondents concede that that is precisely what Section 61 purports to accomplish, and thus it too must fail (see James Square Associates LP, 21 NY3d at 250; Caprio v New York State Department of Taxation and Finance, 117 AD3d 168, 178 [1st Dept 2014] [holding that retroactive application of amendments to Tax Law violated plaintiffs' due process rights]). B. Petitioner's Vested Rights to Overburden Reimbursement Are Not Subject to Retroactive Impairment. To avoid the clear retroactive deprivation of Petitioner's vested rights, Respondents argue that the balance of factors weighs in favor of Section 61 's constitutionality because (1) Petitioner should have calculated and submitted reimbursement claims, notwithstanding: (i) Social Services Law § 368-a's clear language placing the burden solely on Respondents; (ii) the Third Department's unambiguous holding in St. Lawrence I that Petitioner was not required to do so; and (iii) Respondents' admission that they could not calculate the "unknown and unknowable" liability themselves (R 323, 342); (2) the benefits that Petitioner has purportedly received since 2006 under the Medicaid Cap Statute somehow make up for the pre-2006 overburden reimbursements that Respondents unlawfully withheld from Petitioner for approximately three 30 decades and the continuing benefits Respondents receive at Petitioner's expense due to Respondents' refusal to properly code overburden individuals to this very day (R 333-335); (3) allowing Petitioner to collect both the post-2006 Cap "benefits" and pre-2006 unpaid overburden reimbursements would result in a supposed windfall; ( 4) Petitioner misinterpreted the law regarding its statutory right to reimbursement, notwithstanding that numerous courts, including this Court, repeatedly confrrmed Petitioner's interpretation and rejected Respondents' attempts to avoid the State's longstanding and undisputed reimbursement debt, and Petitioner should have assumed that the Legislature would eventually succeed in extinguishing its vested rights retroactively; and (5) the State's interest in fiscal certainty-that is, allowing it to extinguish its outstanding debts by legislative fiat whenever it no longer desires to pay-outweighs Petitioner's right to reimbursement (Resps' Br., at 30-40). As set forth below, under the factors articulated in Alliance, Respondents' assertions are without merit. 1. Section 61 is Manifestly Unfair. The fairness factor significantly favors Petitioner. Petitioner has been deprived of reimbursements that it was statutorily entitled to receive, solely due to Respondents' actions. During the six years in which Respondents contend that Petitioner should have taken some action - 2006 to 2012 - Respondents did not voluntarily pay a single overburden reimbursement claim (R 381, 654-656, 673-677). During the same six year peridd, despite being made aware of the improper coding on their computer system, they did nothing to asce1tain the amount owed to Petitioner and the other counties, let alone fully satisfy their statutory duty to reimburse Petitioner and the counties (R 393-394, 657-666). Thus, it was only due to Respondents' own failures that Petitioner's rights were impacted by Section 61. Moreover, the purported post-2006 benefits manufactured by Respondents are entirely irrelevant to the reimbursements Respondents owe to Petitioner under Social Services Law 31 § 368-a for pre-2006 overburden payments improperly taken by Respondents. As explained more fully below, the Medicaid Cap Statute, which did not become effective until January 2006, is a prospective statute that affects only the manner in which Respondents' post-2006 obligations to Petitioner are paid (see Point III[B][3], irifra). Respondents' pre-2006 obligations to Petitioner remain governed by Social Services Law§ 368-a-a statute that was adopted in 1984 and has not been repealed by Section 61. Therefore, as this Court already held in County of Herkimer v Daines, the Medicaid Cap Statute only impacts Petitioner's ability to submit claims to recoup overburden payments made after January 1, 2006, when the Medicaid Cap Statute became effective (see County of Herkimer v Daines, 60 AD3d at 1457). Respondents' reliance on the purported benefit of the Medicaid Cap Statute also is misplaced since there is no dispute that they failed to include the unpaid overburden reimbursement in Petitioner's 2005 base year Medicaid Cap calculation. This means that, from the implementation of the Medicaid Cap in 2006 to date, Petitioner has paid significantly more than it should have in Medical Assistance expenses each year and will continue to do so unless and until the cap is properly recalculated (R 665-667, 670-672). Respondents will continue to receive the annual benefit of the miscalculation regardless of this Court's decision regarding the pre-2006 reimbursement. Respondents have further benefitted, at the expense of Petitioner and the counties, by failing to credit Petitioner and the counties with an enormous sum of overburden reimbursement accruing each year to date. Again, both of these windfalls could be remedied by a simple program to identify and properly code overburden recipients. Respondents chose not to fix that problem. Respondents' contention that Petitioner purportedly receives certain protections under the Cap Statute that render Section 61 "fair" is entirely irrelevant. For example, Respondents assert that the Cap "shields" Petitioner from contributing to judgments rendered in favor of providers 32 (Resps' Br., at 32-33). Respondents fail to cite any authority in support of this statement which, in any event, is a completely speculative benefit that could not possibly compensate Petitioner and the counties for the millions that Respondents have unlawfully withheld. Respondents' further suggestion that the legislative process leading up to the enactment of Section 61 was all the process due to Petitioner is simply incredible. First, there is absolutely no proof in the record to support Respondents' contention that Petitioner and other counties "lobbied vigorously against the 2012 amendment" (Resps' Br., at 34). Second, Respondents' contention that, in a two and a half-month period between introduction and enactment, Petitioner and the other counties could have somehow identified all overburden-eligible individuals for whom they were not reimbursed and used this information to submit unnecessary claims to DOH (Resps' Br., at 31, 36), wholly ignores Respondents' (1) own contention that these reimbursements are purportedly "unlmown and unlmowable" (R 323); (2) repeated complaints regarding the burdens of calculating these amounts (R 33 8-3 39); (3) failure to accomplish this task despite having approximately thirty years to do so; and ( 4) vigorous denial of all such reimbursement claims during that two-and-a-half-month period. Indeed, as demonstrated above, the Court of Appeals has specifically rejected Respondents' argument that the period between a statute's introduction and effective date can suffice as a constitutionally adequate grace period (see Gilbert, 159 NY at 123-124). Respondents' unsupported claim that due process has been satisfied because Petitioner purportedly has been able to submit the allegedly "stale" claims for reimbursement since the 1990s (Resps' Br., at 30-31), similarly should be rejected. Respondents again attempt to improperly shift their clear statutory burden of reimbursement onto Petitioner. As the Third Department expressly recognized in St. Lawrence III and St. Lawrence I, Petitioner had no obligation to submit claims for reimbursement, and has only been compelled to do so due to the 33 State's failures (see St. Lawrence III, 124 AD3d at 94 ["DOH was required to pay those reimbursements even without any claims being made, and should have done so by 2006.'1; St: Lawrence I, 81 AD3d at 218 n 2). Moreover, Respondents have delayed for decades in calculating and paying the reimbursement indisputably owed to Petitioner, and were the only ones capable of actually identifying the dropped codes, uncoded recipients, and unpaid reimbursement in the first place (R 444-445, 659-665, 667-668). Thus, absent identification by Respondents of the uncoded individuals and disclosure of the relevant records, it was impossible for Petitioner and the counties to identify all the unpaid overburden reimbursement. It also should be noted that Respondents made this precise argument-that Petitioner should have previously submitted its reimbursement claims-in St. Lawrence I. In that case, the Third Department rejected Respondents' argument that St. Lawrence County had failed to timely submit its reimbursement claims (see St. Lawrence I, 81 AD3d at 218). In support of their timeliness argument in St. Lawrence I, Respondents submitted the Affidavit of Nicholas Meister sworn to December 3, 2009 (the "Meister Affidavit") (R 580-598). When the Meister Affidavit (R 587-589) is compared to the Affidavit of Robert LoCicero sworn to September 26, 2013 and submitted in the instant proceeding (the "LoCicero Affidavit") (R 329-331), it is clear that Respondents' argument in this proceeding as to the counties' purported ability to identify unreimbursed overburden expenditures and the alleged ·"staleness" or timeliness of the reimbursement claims is identical to the argument previously asserted in St. Lawrence I. 2. Petitioner Properly Relied on Its Clear Entitlement to Overburden Reimbursement Under Social Services Law§ 368-a. The reliance factor similarly weighs heavily in Petitioner's favor. Reliance is analyzed at the time the local share payments were made by Petitioner to Respondents. Prior to 2006, it was entirely reasonable for Petitioner to rely on the plain language of Social Services Law § 368-a, 34 which expressly states that Respondents shall reimburse Petitioner for all overburden local share payments (see Social Services Law§ 368-a[l][h][i]). Petitioner's interpretation of the law was repeatedly confirmed by this Corut and the Third Department (see St. Lawrence 11, 95 AD3d at 1553; County of Niagara v Daines, 91 AD3d at 1289; St. Lawrence 1, 81 AD3d at 216; County of Herkimer v Daines, 60 AD3d at 1457). Thus, Respondents' contention that Petitioner had "ample forewarning that its claims mightbe extinguished" (Resps' Br., at 35) is meritless. In any event, it would not have been reasonable at any time for Petitioner to expect that the State, after taking the overburden local share payments, would simply refuse to pay its creditors. The State lacks the authority to simply abrogate its own debts whenever it detennines it no longer desires to pay them, especially when doing so deprives Petitioner of its vested rights to reimbursement (see e.g. O'Neil v State of New York, 223 NY 40, 43-44 [1918]; see also Rhem v Malcolm, 507 F2d 333, 341 n 20 [2d Cir 1974]). Respondents cannot justify this unabashed attempt to extinguish their prior debts to Petitioner by citing their own erroneous interpretations of the Medicaid Cap Statute and 2010 Amendment, which were properly rejected by all courts that have considered them. Respondents' suggestion that, to avoid their own baseless attempts to eradicate the State's overburden reimbursement liability, Petitioner should have submitted reimbursement claims simply defies logic. As the Third Department explicitly recognized, Petitioner had no obligation to submit claims, or to talce "any action to receive reimbursement for overburden expenses" from DOH (see St. Lawrence 1, 81 AD3d at 214 [emphasis added]). In fact, DOH's Deputy Director for Administration admits that Petitioner has no obligation to submit reimbursement claims (R 339). Respondents admit, instead, that it was their responsibility to "identify] those Medicaid recipients who were mentally disabled under the applicable overburden criteria" (R 327, 338, 355). Respondents have failed to satisfy this responsibility for 35 decades and, in fact, still have no intention of doing so, to the further expense of Petitioner and the counties (see R 338-340). Even if it was Petitioner's duty to calculate the reimbursements and submit claims (which it is not), Petitioner was never provided with all the information it would need from DOH in order to make these calculations and, due to Respondents' suspension of claim processing in April 2005, Petitioner effectively was denied the opportunity to submit reimbursement claims (R 654, 667-668). Simply stated, Petitioner's actions or inactions since 2006 are inelevant. Since 2005, there has not been a single instance when Respondents paid an overburden reimbursement claim without being compelled to do so through litigation, including during the two and a half months between Section 61 's proposal and effective date that Respondents tout as a "grace period." Thus, Petitioner's reliance on the express reimbursement obligation contained in Social Services Law § 368-a, which still has not been repealed to date, when paying the overburden local share payments to Respondents prior to 2006 was entirely reasonable. 3. The Extent of Section 61's Retroactivity is Excessive. Respondents assert that Section 61 is a prospective amendment because it bars claims submitted after April 1, 2012. This argument is incredible in light of Respondents' persistent arguments that Section 61 is and was intended to be expressly retroactive, and seeks to deprive Petitioner and other counties, in 2012, of reimbursement for payments taken and concealed by Respondents as far back as 1984 (R 336, 339). Inasmuch as Respondents argue that Section 61 extinguishes over 30 years of overburden reimbursement liability, it is unquestionably significantly retroactive. Respondents seek to avoid the expressly retroactive language of Section 61 by claiming that it merely "clarifies" that the Medicaid Cap---a wholly separate statute, which first went into effect on January 1, 2006-retroactively extinguishes Petitioner's vested right to reimbursement 36 for overburden payments taken by Respondents prior to January 1, 2006 (Resps' Br., at 37-39). To "clarify," however, means to make plain something that already exists, but is ambiguous (see Merriam-Webster's Collegiate Dictionary, at 228 [11th ed 2004] [defining "clarify" as "to free of confusion" or "to make understandable"]). The Legislature cannot "clarify" that, contrary to the holdings of this Court and the Third Department, the Medicaid Cap Statute is retroactive when the statute was not made retroactive in the first instance. By its very terms, the Medicaid Cap Statute is effective as of January 1, 2006 and, therefore, applies only to expenditures incurred from January 1, 2006 forward (see Dorfman v Leidner, 76 NY2d 956, 959 [1990]). The statute contains no language, much less a clear expression of intent, indicating that it should be applied retroactively, nor does it even mention the overburden obligation. In fact, the Medicaid Cap Statute is loaded with prospective terms indicating that it can only be applied going forward (see e.g. L 2005, ch 58, part C, § l[c] "[c]ommencing with the calendar year beginning January 1, 2006, calendar year social services district medical assistance expenditure amounts for each social services district shall be calculated by multiplying the results of the [cap] calculations" [emphasis added]). Further, in the prior overburden litigations, this Court and the Third Department extensively analyzed this language and the legislative history underlying the Medicaid Cap Statute, and each time concluded, contrary to Respondents' suggestion, that the prior enactment was not intended to retroactively deprive Petitioner of its vested right to reimbursement (see St. Lawrence I, 81 AD3d at 215; County of Herkimer v Daines, 60 AD3d at 1457). In fact, all of the courts that have considered the language and legislative history of the Medicaid Cap Statute have reached the same conclusion: the Medicaid Cap Statute did not supplant the provisions of Social Services Law § 368-a as it pertains to overburden payments made prior to 2006. Respondents do not, and cannot, point to any language or legislative history of the 37 Medicaid Cap Statute that supports their post-hoc argument in this proceeding that a retroactive impairment of Petitioner's vested rights to reimbursement was intended all along (see Matter of Thomas v Bethlehem Steel Corp., 63 NY2d 150, 154-155 [1984] [after reviewing the legislative history, and finding an "absence of clear legislative indication that the statute be applied retrospectively," detennining that statute should not be given retroactive application]). Instead, Respondents solely rely on the legislative history of Section 61, a separate statute, to support their interpretation. As a result, even if Respondents' contention that Section 61 is a "clarifying amendment" were correct (which it is not), Respondents' position still fails. A '"clarifying' amendment ... cannot retroactively declare a different legislative intent contrary to the plain meaning of the earlier law" (Boltja v Southside Hosp., 186 AD2d 774, 775 [2d Dept 1992]; see also Matter of Roosevelt Raceway v Monaghan, 9 NY2d 293, 304 [1961]; Matter of Island Waste Servs., Ltd v Tax Appeals Trib. of State of NY, 77 AD3d 1080, 1083 n 2 [3d Dept 2010], Iv denied 16 NY3d 712 [2011]). Respondents suggest that the Legislature's Memorandum in Support of Section 61 indicates that the intent of Section 61 was to "clarify" that the Legislature previously extinguished Petitioner's statutory right to reimbursement. The Legislature's purported "clarification," however, is entirely inconsistent with the intended prospective application of the Medicaid Cap Statute; as such, Section 61 cannot have merely "clarified" the Legislature's original intent. Thus, the Legislature's belated pronouncement of its purported prior intent in support of Section 61 is wholly ineffective to change the plain, unambiguous language of the Medicaid Cap Statute (see Roosevelt Raceway, 9 NY2d at 304 ["(t)he Legislature has no power to declare, retroactively, that an existing statute shall receive a given constmction when such a constmction is contrary to that which the statute would ordinarily have received"]; Boltja, 186 AD2d at 775; Island Waste Servs., 77 AD3d at 1083 n 2). Moreover, even assuming, arguendo, that Respondents were correct that Section 61 is a 38 clarifying amendment (which, again, it is not), Section 61 would overturn this Court's precedent, and the precedent of numerous courts across the state, merely to clarify that the Medicaid Cap Statute unconstitutionally deprives Petitioner of its preexisting rights to reimbursement under Social Services Law § 368-a. Notably, Respondents do not, and cannot, point to any case where an amendment clarifying that a prior statute was intended to abrogate a preexisting right has been upheld as constitutional. Under Respondents' construction, the Medicaid Cap Statute fares no better than Section 61, because the Medicaid Cap, which went into effect on January 1, 2006, also would retroactively impair Petitioner's vested rights to reimbursement for overburden payments. As this Court and the Third Department have held, at the time that the Medicaid Cap went into effect, Petitioner's right to reimbursement under Social Services Law § 368-a had already vested (see St. Lawrence I, 81 AD3d at 216; County of Herkimer v Daines, 60 AD3d at 1457). Therefore, even if Section 61 merely clarifies that the Medicaid Cap Statute unconstitutionally impairs Petitioner's vested rights to reimbursement for overburden payments, Section 61 cannot have a rational basis and should be invalidated by this Court. 4. The Public Interest Require& Reimbursement of the Improperly Retained Overburden Payments to Petitioner. Without citing any legal authority, Respondents claim that the purported public interest served by the law is to provide the State with certainty that it can avoid its overdue debts (see Resps' Br., at 39-40). There is no authority in support of this purported interest because it is not the type of oveniding public interest that is compelling enough to deprive Petitioner of its constitutionally protected property rights. To the contrary, the Court of Appeals recently held that the State's budgetary concern is not a "valid public purpose" for retroactive application of a statute (James Sq. Assoc., 21 NY3d at 249-250; see also Caprio, 117 AD3d at 178). In fact, permitting Respondents to avoid their clear statutory obligation to reimburse Petitioner would 39 disserve the public interest, because it would encourage DOH and other agencies to (1) avoid timely compliance with their statutory obligations; (2) engage in dilatory tactics, including interminable litigation, to frustrate these obligations; and (3) lobby the Legislature to retroactively change any statutes with which they do not wish to comply, without providing any notice to those affected, in hopes that the agencies could ultimately avoid their obligations entirely. In order to serve the true public interest here, Respondents must be compelled to reimburse Petitioner's overburden payments to the county taxpayers from whom they were improperly taken. Thus, inasmuch as the balance of the factors set forth in Alliance weighs heavily in favor of preserving Petitioner's vested rights against Section 61 's attempt at retroactive extinguishment, this Court should alternatively declare Section 61 unconstitutional and affirm the Supreme Court order. POINT IV SUPREME COURT ERRONEOUSLY DECLINED TO COMPEL RESPONDENTS TO REIMBURSE PETITIONER PURSUANT TO SOCIAL SERVICES LAW § 368-A Notwithstanding that Supreme Court, Monroe County properly held that Respondents could not rely on Section 61 to deny Petitioner's claims for reimbursement, and compelled Respondents to pay Petitioner the $4,713,748.94 in overburden reimbursement claims that Petitioner submitted to DOH, the Court declined to compel Respondents to calculate and reimburse Petitioner for the total remaining overburden liability pursuant to Social Services Law § 368-a. Supreme Court's refusal to order Respondents to satisfy their clear statutory reimbursement duty after declaring Section 61, the only possible barrier to Petitioner's request for mandamus relief, unconstitutional was error. In fact, the Third Department specifically held in St. Lawrence III that the counties are entitled to the same mandamus relief that Supreme Court 40 denied below. Therefore, this Court should modify the Supreme Comt judgment by compelling Respondents to calculate and pay Petitioner the total remaining overbmden reimbmsement owed in accordance with Social Services Law § 368-a. Mandamus "lies to compel the performance of a purely ministerial act where there is a clear legal right to the relief sought" (Klostermann v Cuomo, 61 NY2d 525, 539 [1984]). Under Social Services Law § 368-a, Petitioner has a "clear legal right" to reimbmsement for "one hundred per centum of the amount expended for medical assistance for those individuals who are eligible" (Social Services Law§ 368-a[l][h][i] [(emphasis added]). It cannot be disputed that Respondents have unreasonably withheld these reimbmsements from Petitioner in derogation of Petitioner's statutory rights. Respondents argued below that they were barred from performing their mandatory reimbursement duty under Social Services Law § 368-a because Section 61 provided a clear mandate to DOH forbidding the payment of overburden reimbmsement. After holding that Respondents could not rely upon Section 61 to deny Petitioner the overbmden reimbursements it is owed, however, Section 61 's supposed barrier to Respondents' mandatory reimbursement duty was extinguished. Indeed, as the Third Department held in St. Lawrence III, Petitioner asserts that it was entitled to a writ of mandamus to compel DOH to comply with the mandate of Social Services Law § 3 68-a ( 1 ), which states that DOH "shall" reimburse petitioner for, among ,other things, overburden expenditures; the statute does not include any requirement that petitioner make a claim for those payments. Thus, DOH was required to pay those reimbursements even without any claims being made, and should have done so by 2006. This Court has already determined that the state cannot be relieved of its obligation to refund the counties for overburden expenditures made prior to January 1, 2006. As DOH's statutory obligation to make reimbursement for these expenditures is mandatory and ministerial and does not involve any discretion, petitioner was entitled to a writ of mandamus requiring DOH to review its records to identify any individuals who may not have been properly coded as overburden patients, and all medical services that were provided to individuals who were or were not properly coded as overburden patients, then process all pre-2006 overburden expenditure reimbursements to petitioner 41 (St. Lawrence III, 124 AD3d at 94 [citation omitted]). Because Social Services Law § 368-a has not been repealed, and Section 61 may only be construed as a statute of limitations extinguishing the remedy to recover overburden reimbursement, but not the underlying statutory right (see id. at 92 ["we have herewith determined that the amendment did not extinguish petitioner's substantive right to reimbursement; the amendment only prevents petitioner from obtaining any remedy in relation to that right after a certain date"]), Supreme Court's refusal to grant mandamus relief compelling Respondents to identify, verify, and pay the total unpaid overburden expenditures that Petitioner incurred prior to 2006 was enor. Respondents alternatively argued below that mandamus relief does not lie because DOH has the discretion to review and deny overburden reimbursement claims that do not meet the set reimbursement criteria. The Court of Appeals in Klostermann, however, rejected this precise argument. In Klostermann, the plaintiffS sought mandamus relief compelling the State to comply with its mandatory duty under Mental Hygiene Law§ 29.15 to prepare a "written service plan" for each patient being released from a State psychiatric institution (Klostermann v Cuomo, 61 NY2d at 532-533). As here, the State opposed that relief arguing that mandamus did not lie because executing its statutory duty to prepare the written service plans was an activity "replete with decisions involving the exercise of judgment or discretion" (id. at 539). Although the Court of Appeals agreed that preparing the actual plans inarguably involved discretion, that fact was insufficient to deny mandamus relief compelling the State to prepare the plans in the first place as mandated by the Mental Hygiene Law (see id. at 539-541 ). Specifically, the Court of Appeals held: Defendants argue that preparing written service plans and creating follow-up programs are activities replete with decisions involving the exercise of judgment or discretion. This is inarguably true. What must be distinguished, however, are 42 those acts the exercise of which is discretionary from those acts which are mandatory but are executed through means that are discretionary ... What has been somewhat lost from view is this function of mandamus to compel acts that officials are duty-bound to perform, regardless of whether they may exercise their discretion in doing so. "[T]he writ of mandamus ... may also be addressed to subordinate judicial tribunals, to compel them to exercise their functions, but never to require them to decide in a particular marmer . . . This principle applies to every case where the duty, performance of which is sought to be compelled, is in its nature judicial, or involves the exercise of judicial power or discretion, irrespective of the general character of the officer or body to which the writ is addressed. A subordinate body can be directed to act, but not how to act, in a marmer as to which it has the right to exercise its judgment. The character of the duty, and not that of the body or officer, determines how far performance of the duty may be enforced by mandamus. Where a subordinate body is vested with power to determine a question of fact, the duty is judicial, and though it can be compelled by mandamus to determine the fact, it carmot be directed to decide in a particular way, however clearly it be made to appear what the decision ought to be" (id. at 539-540, quoting People ex rel. Francis v Common Council, 78 NY 33, 39 [1879]) As in Klostermann, Petitioner here sought mandamus relief compelling Respondents to satisfy their mandatory duty under Social Services Law § 368-a to calculate and pay Petitioner the total remaining overburden reimbursement outstanding. Although DOH's act of initially setting the criteria under which an individual was overburden eligible may have involved discretion, Respondents' obligation to reimburse Petitioner upon determining that an individual for whom Petitioner paid a local share satisfies that the eligibility criteria is in no way discretionary. In fact, according to DOH's own Medicaid Reference Guide Manual, Respondents must find that an individual is overburden-eligible if he or she meets one of the following factual criteria: (1) resides in a Residential Treatment Facility certified by the New York State Office of Mental Health or in an Intermediate Care Facility for the Developmentally Disabled certified by the New York State Office for People with Developmental Disabilities; (2) was discharged from a New York State Office of Mental Health Psychiatric Center or New York State Office for People with 43 Developmental Disabilities Developmental Center from April 1,. 1971 to December 31, 1982 and has 90 or more cumulative days of inpatient treatment; (3) resides in a commUnitycbased facility as certified by the New York State · Office of Mental Health or the New York State Office for People with Developmental Disabilities. This includes A/Rs who: have received services in certified CommUnity Residences (CR) or Individual Residential Alternatives (1RA ); are residents of schools certified by the New York State Office for People with Developmental Disabilities; are inpatients in Terrance Cardinal Cook (Flower Hospital); or (4) receives a minimum of 45 visits in any calendar quarter of day or continuing day treatment programs (including Subchapter A day treatment). (R473). The overburden eligibility criteria afford Respondents absolutely no discretion to determine that a certain individual is not overburden-eligible where the factual circumstances surrounding that individual's medical care satisfy the criteria. Simply put, once the factual predicate for overburden eligibility is established as provided under the Medicaid Reference Guide Manual, reimbursement is necessai·y under Social Services Law§ 368-a and Respondents have absolutely no discretion to avoid it (see e.g. Matter of Brusco v Braun, 84 NY2d 674, 680 [1994] [granting mandamus to compel where the two factual·predicates of the statutory duty had been satisfied and holding that, in that case, "respondent has no discretion; judgment in favor of petitioner must be granted and mandamus lies to compel respondent to do that which the statute requires"]; Matter of County of Fulton v State of New York, 76 NY2d 675, 678 [1990] [granting mandamus to compel payment of assessments where statute expressly provided that assessments "shall be paid by the river regulating district"]). 44 Petitioner does not seek reimbursement for any individual that does not satisfy DOH's set overburden criteria or to compel Respondents to unde1iake any specific method for satisfying their statutory reimbursement obligation, establish a particular amount owed to Petitioner, or reach a specific conclusion. Petitioners merely seek to require Respondents to forgo any further dilatory tactics, fulfill their statutory duty, and resolve the outstanding overburden reimbursement liability to Petitioner once and for all. Supreme Court therefore erroneously declined to compel Respondents to calculate and pay Petitioner the total remaining overburden reimbursements owed in accordance with Social Services Law§ 368-a. CONCLUSION For the foregoing reasons, Petitioner respectfully requests that this Court modify the Order of Supreme Court, Momoe County consistent with the holding of the Third Department in St. Lawrence III and, as so modified, affirm the order in its entirety, or alternatively simply affirm the Supreme Court order, and award Petitioner such other and further relief as this Court deems just and proper. Dated: February 9, 2015 Albany, New York By: WHITEMAN 0 TERMAN & HANNA LLP C, Christopher E. uckey, Esq. Robert S. Rosborough N, Esq. One Commerce Plaza Albany, New York 12260 (518) 487-7600 NANCY ROSE STORMER, P.C. Nancy Rose Stormer, Esq. Michael Bagge, Esq. 1325 Belle Avenue Utica, New York 13501 (315) 797-0110 45 BOND SCHOENECK & KING, PLLC Raymond A. Meier, Esq. 501 Main Street Utica, New York 13501 (315) 738-1223 Attorneys for Respondent 46 ADDENDUM Matter of County of Broome v Shah Index No. 2014-0090 PRESEN'J.'; HONORAEtE JEFFREY A. TAIT JUSTICE PRESlDlNG STATE OF NEW YORK SUPREME COURT; COUNTY OF BROOME In the Matter of COUNTY OF BlWOME, Petitioner-Plaintiff, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules and a Declaratory Judgment PursuMt to Section 300l of the Civil Practice Law and Rules -against- NIRA V R. SHAH, M.D., M.P .H., as Commissioner of the New York State Department of Health and THE NEW YORK STATE DEPARTMENT OF HEALTH, Respondents-Defendants. APPEARANCES: Christopher E. Buckey, Esq. White, Osterman & Hanna, LLP Attorneys far Pelilioner-Plaint(ff One Commerce Plll.Za Albany, NY 12260 Nancy Rose Stormer, Esq. Nancy Rose Stormer, P.C. Attorneys for Petitloner-P/ainfijJ' 13 25 Belle A venue Utica, NY 1350! At a Term of the Supreme Co1nt of tb.e Slate ofNew York, held in and for the Sixth Judicial District, at lhe Broome County Courthouse, in the City ofBi11ghamto11, New Yark on the llth day of March 2014. DECISION AND ORDER Index No, 2014-0090 RJI No. 2014·0071-M C. Hru:rls Dague, Esq. Assistant Attorney Genoral Attomeys for Ra•pondent-Defendcm1 . '.Fhe Capital Albany, NY 12224-0341 HON. JEFFREY A. TAIT, J.S.C. This matter is before the Coi1rt on the hybrid CPLR Article 78 proceeding and plenary action commenced by Petitioner-Plaintiff County of B1·oome (County) seeking to compel reimbursement for certain Medical Assistance costs from Respo11dents-Defendants Nirav R. Shah, M.D., M.P.lt, as Commissioner of~e New York State Department of Health, and the New York State Department of Health (together refen·ed to as State). In opposition, the State submits an Answer to the Article 78 claims and moves for summary judgment dismissing the County's declaratory judgment and state law plenary c!aims. Arguments of the Parties The County asse:tts that between January l, 1984 and December 31, 2005 it incurred expenses ou the State's behalf for the treatment ofoertaln mentally disabled Medical Assistance recipients, known as "overburden expenses."' The County cl!lims that the State has refused to reimburseitfor those expenses, whlch total at least $1,170,022,83 and the State is obllgated to pay pursuant to Soclal Services Law§ 368-a.2 The County asserts that it transferred Coun1y funds to the State to satisfy the cost of treating these individuals on a weekly basis, and the State was then responslble for identifying those who satisfied the overburde11 criteria and reimbursing the County for the costs of their treatment pursuant to Social Services Law § 368-a. , Ad.nailed recitation ofl:he history of and interplay between Social Services Law§ 368-a and the 2005 Medicaid cap legislation and the 2010 amendment thereto, as well es the related litigation regat'ding the impact on the payment/reimbursement of overburden expenses, is contained in the papers submitted by both the County and the State and thus will not be repeated here. · 011 th.is application, the County seeks!an Order: annulling the State's December 20, 2013 determination denying its claims for reh~bursement for pre-2006 overburden expenses; compelling the State to approve and pay its claims Jn that regard; compelllng the State to calculate and pay the total remaining overburden relmbm·oementa due; declaring Sectiorr 61 of Pait D of Chapter 56 Qf the Laws of 2012 (Section 61) unconstitutional; awarding the County damages of no less than $1, 170,022.83; imposing a constructive trust over such funds owed by the State; and awarding the County costs, disbursements, and cotmsel fees. The State's primary argument in opp~sitlon to the County'sclaimslsthat Section 61 bars reimbursement of the overburden expenses sought by the County. Section 61 provides: Notwithstanding the provisioi;is of section 368-a of the social services law or any other contrary pro~ision of law, no reimbursement shall be made for social services dist1cts' claims submitted on and after the effective date of this paragrnplii, for district [overburden] expenditures incurred pdor to January 1, 2b06 .. , The State submits the affidavit of Robert LoCicero, the Deputy Director for Administration with the New York State Department of Health, who stntes that the purpose of Section 61 was to address prior litigation' and "to 'wall-off' any further potential State liability for such overburden reimbursement claims that were st1bmitted on or after the provision's Prompted by the State's prior refusals to re!mbnrse counties for pre-2006 overburden expenses, wlth the State first relying on the 2005 Medicaid cap legislation (effective January ! , 2006) and then on the 20 I 0 amendment theroto as a basis to deny thedalrns. The State claimed both barred reimbursement for pre-2006 overburden expenses. This led ro several rounds of litigation by multiple counties, with courts uniformly rejecting the State's interpretation of the Medicaid cap and later amendment and 001:1pelling reimbursement of pre-2006 overburden expenses pursuant to Social Services Law§ 368-a(see Matlerq{County of St. Lawrence v, Shah, 9$ AD3d J 548 [3d Dept2012)(2010 amendmentto the Medicaid cap statute did not relieve State of its obligation to reimburse counties for overburden expenditures made prior to that statute's effective date]; Matter of County o[Niagara v. Daines, 91 AD3d 1288 (4th Dept 2012]). 2 effective date of Aprill, 20l2" (see LoClcero affidavit at~ 50). The State frames Section 61 as a "clarifying amendment" meant to make it clear that the State is not _permitted to make reimbursement payments to county social service districts for pre-2006 overburden expense claims. In reply, the County argues that Section 61 is not merely a "clarifying amendmene• and instead amo\lnts to a substantive deprlvatlan of its vested right to reimbursement of the I overburden expeMes which is being retl'oaciively applied. The County points out that several courts have recently found Section 61 unconstitutional (see Matter of County of St. Lawrence v. Shah, Sup Ct, St. Lawrence County, August 30, 2013, Demarest, J., Index No. 014 [656; MatterofChautauquaCount;vv. Shah, Sup Ct, Chautauqua.County, December9, 2013, Chimes, J., Index No. 2013-1266; Matter of County oj'Jefferson v. Shalr, Sup Ct, Jefferson C()unty, January 15, 2014, Gilbert, J., Index No. 2013-1956; Mailer of County of Oneida-.. Shah, Sup Ct, Oneida County, Febniary 28, 2014, Cl~k, J., Index No. 2013-1788; see also Malter of Chemung County vs. Shah, Sup Ct, Chemung Coun(:y, November 19, 2013, O'Shea, J., Index No.: 20{3-1849 [annulling State's denial ofCout1ty's overburden reimbursement claims and I ' granting Petition to allow such claims]; Ma/fer of County of Niagara v. Shah, Sup Ct, Niagara County, June 18, 2013, Panepinto, J., Index 1'fo. 149492-2013). The County also points out that Sectio11 61 only prohibits payment of "claims submitted" and does not impact the State's statutory obligation to calculate the total reimbl)fsem~11t liability 1mder Social ServlCw Yol'k-State Deparl:ment·of;Heaith vlt of Robert. LoClooro-llwom to Ap11111, 2014 Jn response. to the Veioffied PetitloJ1. and Comp.lal:n1 an j q 1 i .! ' i f i ' ,, l ! ~ l ., 1 Apl'il 28, 2014, an,d moved for $llll1l11ary jt1dgmerrt 011 Petltione1·'s declaratory judgrrienl and state :law p.leha1:y clahns, atguln,g ·that Respondents· were no longer obligated to roimbmse Petitioner for the claims asserted it• th.ls proceeding because Section 61 extinguished Petitioner's right to i·ehnbw:semen:t.-for pre,2(')06 Ove1·bmden costs uiiclel' 'Social Services Law § 368-a; WJfJJ;REAS, i>etltioper served· the Rep.ly Affidavit ofNan.oy Rose Stormer sw0m to May. 6, 2014 mid the Affidavit of Christopher E. Buckey sworn to !1-!!ay 6; 2014 on May 6 201-4 and opposed. Respondents' motion fo.c sunw@+'Y. jwd15mei1t o.n its· d\fclaratory ju<(gment and state law plenary clai:ms._ Petitioner contendecl that" Section 61 did not ext.lnguiilh Petitioner's right to reimbi:1rsement for pro-2006 Overb:Utden. paymcilts under· Soclal Services Law § 368-a bMat1sc: (1) fosofm· t\S Section 6l attempts to-.deny Petitione.1"vepay.rnent of obligations already accrued,..Jt is imoonstitnt.ional; (;<.) the jllt!iil language of SectfQ11 61 b~rs 1elniburse1\iefit for claim~ tl1at Petlt.t'o.n amounts owed;· (3.) Respondents' decad.es•long cotirse·ofjntei1titmatly or l)egli.gently dilo:tory- conduct peiwlts tbJs·Courtto apply .Sodal Sei'Vfo.es L:l:w §. 3'QS;a .as lt exfate& ·at 'the. time tbit.t fetlti!iiler i1wuii:<1(f: the Owi-b11tden eipl'ocess of law: (7). Respo11dents" defonse bas~o or1 the doctrine of liwhes Js bai1·ed by. ·collateral estoPl'el; 2 and (8) SectJon 6 l does not bal' Petitl.onel' from 1•ecove1ing for conversion, unjust enricli111en~ and oonsirnctlve \l'ust; WflltRJCAS, tho Cot1rt havhig hemtl oral ~1·g;nnent of counsel for the pa!'!J\'s on lVf&Y 13, 2014;. and NOW, upon due 0o11sidernt!cr11 of'all \lie· pleadihgs a111:l proceedings in this matter and the oral argume11ts of coimsel, ii is hereby ORDERED, AD'JIIDGED AND DEClU!;ED that, fol' ihe reasons s_et forth in the tl'ansct.ipt of the- May 13., 2014 pl'o_oeed,ings 'before tltis Cpurt ("Tianscl'i.pt") (attached hereio as Exhibit .A), tnis Court finds thatPetitioner'-s dghtto rclmbi.n~en"ient tinder Social Serv.!Qes Law§ 368,a acci'Ued p1io1· to 2006, upon l?etif!qner's _pa.y1110rrt to DOI{ for ~ervio"eS· provl<\((d to overburdened p~tiel).ts for whieh na Jooar sha1,,·was owing; and it is :fhrther ORD.ER.ED, ADJUDGED A-ND- DECREED· that, fo1· the reasons set futih h1 the Trllitscript, this Coui-t .finds that :i'etitio1ie.i''s dg'ht 1:0 1elmbursement 11nder Social 8e1:v!ces .Law § 368.;c is a vested.right that cmlilot be extlnj\lliHhed.by retroa:ctive legislailon; and it i~ fUdhet· ORD.ERE]), ADJUDGED Al\!D DECREED that. for the reasons set forth i11 the Tranwrl'pt, insofar as. Seotl-011 61 attempts to deny the C61mty ~epaymerrt of. obllgatim1s. ali'eady aoorned, it is unc.onstito.tion.a1; and lt is fu.i·tl1er ORDERED, AJMtrD(}ED AND DECREED that the V:erifiea:Petitio1t.i111d Complaint. is granted ui part and denied ln-,pm·\; and it is futth~r ' ORDERED, tlJ)J1IDGED AND .DECIUlll!)D that· ·the detel'lnination of Respondi;mts, ilated Fcbmary 10, ·2014, purporting to deny l'etiti011et'.s "Claims for .1'eimbn.tsement of the · overht1rde11 expenses. that Petitioner incimed on behalf of Respondents prior to .Jtmimry 1; 2006, 3: ~- pll!'sUttllUo Sodal Services Law fr 368··U. so:loly 011 ·tlie bMis of Section 6"1, ls hereby anm11lod as al'bitrm·y and oap1'iilio.l\& an!l/cr afteoted. by ·an et101· oflaw; and it is ·f.wtbe1· OimERJID", ADJftIDGl.W AND DECREED ·iimr, . .fbr tlie reMons set forfh In the Ttallilorlpt, Re&poni!ents are directed to fo1thwith allow Petitfoner'·s ofoJms. for rehnbtirsement and to pay $426;630.15 to Pelitimiei;wl:thin.30 clays of seivloe wltli Notice of Entry of this Order a11d Judg:melit;, and lt is t\:Jrthei· ORD.l£R.El); ADJUDGED AND DECREED that.the remaining relief requested ,\n tjw Verified Petiti.011 iind Complaint is debred ru;.academic, Dated1 Auburn,.New York May ..tt~, 201"4 4 SOOlWERED, EXHIBIT A 1 SUJ?RE:ME COURT OF nJE: STM'E OU' NEW YORK COUNTY OF CA£UGA M01'l0N TERM ____ ,... .. , ... - .... ~ ... -- ... ,.... ...... __ ,... __ ~_,.... _____________ .., __ w_,...~ .... x 3 COUNTY OD' Cl\YliGA1 .1 lnd.;x No, Pet.i,t:hmer1 :2014-Q26:L 4 -against- NIRAV R, Sl!J\H., ·Mb,. MJ?H, h$ ·CQMMI.ssr.mi·l!m OF 5 THE NEW YOF\\ S.TATil DEPARTMEJ>lT OF HEl\LTfl AND THl!i NE:W YORI\ S.TATE· DEPARTMENT ()E' l:lll!ALT!i, 6 Respondents. : Decisio)1 7 g 9 J.O 11 12 13 J.4 i·s 1.6 17 1$ 20 2:L 22 24 25 ...., _____ ..., ... ...,_.,,..,.....,_.,. __ .., .......... ____ ""'""'t ___ ................................. --~ .. ---x Cayuga ~aunty Courthouse Aubu~n1 New York May l,3 1 2·0.H HON.. '!HOl>!As: G. LEONE, Jus.t:l.ce WflIT.ElWl/.l, .OST·Jil\lMAN & H/l;NNA, LLP Attorneys for the P.eti·t:!.oner Ons Co:mn1$-r'C-e Pl.~.za ·/Urrany r Ne:w Yo1'1< rn·zoQ RY: 8HRIS.TO.PHllR ill.. BO.OKES, ESQ. 1 o~ i;ioi.insel NEW YORK. S'BM'E OFFICE ,Oli' '!'HE 1\TTQRNl\Y GgNERAL .Att:orneya for Respondents 61'5 Rid.<' Boule'(ard West;, Suite 102 Syracuse, tl.ew York 13°204·--24-65 BY: jlONNil!l G, LEJVYr ESQ'., Asaist.an·t. Attorney Gerieral, of oo\lil3el Lia.a M. Gia.ooM R.PR, Rl>m, CSR l 1 2 3· 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 zo 21 Z2 23 2~ 25 2 '11f1E GOORT ~ l\J.J. right. .1111 right.. First of all, r want. to tl;lal)k bqth aiotomeys for tlrnii: submissiot'].s· .and their otal atguments and the1r prof-e,'3sional1:sm and court•e;Sy that. t:heyr·ve shown to on·i;:i pnothi."-'t', The Com::t is i;io.ing· to mille );po qi;rj o{pted, ·ll'or, ·the re;ls.on·s that ~ere "''°~ forth ;\..l> the dounty' s paper'3 ,;n:cl t!>e .consistent. Court determin .. tions which this Couxt ad·opts·, the :t:"e·spondent.s 1 motion fGr aumniRrY judgme:n.tr the defenses, ~Kct1s-e :rne, and/or :objections of law are rejeote.d. Tb.e Coi;n::t is• going to declare· tb,at Sec.ti.on 6·1 of ~art D· ·o.;e .Chaptt}Dty 1 s. reque.Eit _f.9r. an ·o-rder i!t the 11at\1re of a mand;;i.llJ.U,t legit-imat<> wHhin :30 days o.f servi·ce of the noti·ce. 0f et1try of an orde.r., r "m going to deny· any and all other re.lief .as moot, and I'm going to ask Mr, J3qckey l.f he would b'e kind to prepare the prop·os.ecl order -- k:ind enough to prepare: tl;le p!'opo·sed ·0rder. MR. BUCKIDY ! r wiU, Your Honor. ~n ow:- petition we aft]< that the Court aia'o dii:ect t))&. State to calaula.te. &n)' amounts that a.re due and iowi.iw to the County q.oim;r fo.rward. Is the Ce>urt is that part of tbs rel.ie-f that the. Coqrt. J;~ denyin·g as mo·ot or shoul(l I in chi.de 't'h'at affirmative :1:'.elie.f. in the vroppaed order and ;)utlgment2 THEl COURT 1. I am 90.:i.n11 t·o deem that as be.ing moot, .MR, .El'Q.C:l(Jlly: Ok~y, We will subn\i t J:t· on notice, ¥oU.t .FJonor; TBre C)OORT: AU r-:ight. r. appl'eciat·e it. 'J,'hank yo.u. ve:r.y much, MS, LffiVY: ThanK. you. MR. B0C£\F.Y: Your .Hon·o:r,. thaBk you ve-:ry much,. •rflre COURT: Good to see .b.otb of yo1i, z 5 6 7 8 10 11. 12 13 i4 15 17 18 19 20 23 4 sor:i;y. to hold y.ou t1J:l so leng. MR, BUClu>:a-te tr.ansc_:dpt,) Matter of County of Chautauqua v Shah Index No. 2013-1266 SUPREME COURT OF THE STA TE OF NEW YORK COUNTY OF CHAUTAUQUA In the Matter of COUNTY Of CHAUTAUQUA, Petitioner-Plaintiff, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules and a Dechn·atory Judgment Pursuant to Section 3001 of the Civil Practice Law and Rules -against- NIRA V R, SHAil, M.D., M.P .H., as Commissioner of the New York State Department of Health and THE NEW YORJ( STATE DEPARTMENT OF HEALTH, Respondents-D7fendants. ORDER AND JUDGMENT (2<>13 - I l..b"' Index No.: eY-2613•1'7"&8 Hon. Deborah A. Chimes WHEREAS; Petitioner County of Chautauqua ("Petitioner") commenced the above- captioned hyb1id CPLR Article 78 proceeding and plenary action by Verified Petition and. Complaint, dated September 6, 2013, seekihg, among other things, to compel Respondents Nirav R. Shah, M.D;, M.P.H., as Commissioner of the New York State Department of Health and the New York State Department of Health ("DOH") (collectively "Respondents") .to reimburse Petitioner for a total of $217,967.75 in certain Medical Assistance costs commonly knowu as Human Services Overburden ("Overburden") pursuant to State law, to compel Respondents to calculate and pay the total Overburden liability owed to Petitioner, and to declare Section 61 of Part D of Chapter 56 of the Laws of 2012 ("Section 61 ")unconstitutional; WHEREAS, Respondents served their Verilled AnsV,;er and_ supporting Affidavit of Robert LoCicero sworn to September 26; 2013 in response to the Verified Petition and Comp.laint on September 30, 2013, and moved for summary judgment on Petitioner's declaratory judgment and state law plenary claims, arguing that Respondents were no longer obligated to reimburse Petitioner for the claims asserted in this proceeding because Section 61 extinguished Petitioner's right to reimbursement for pre-2006 Overburden costs under Social Services Law § 368-a; WHEREAS, Petitioner served the Reply Affirmation of Nancy Rose Stormer dated November 8, 2013 and the Affidavit of Christopher E. Buckey swam to November 8, 2013 on November 8, 2013 and opposed Respondents' motion for summary judgment on its declaratory judgment and state law plenary claims, Petitioner contended that Section 61 did not extinguish Petitioner's right to reimbursement" for pre-2006 Overburden costs under Social Services Law § 368-a because: (1) insofar as Section 61 attempts to deny Petitioner repayment of obligations already accrued, it is unconstitutional; (2) the plain language of Section 61 bars reimbursement for claims that Petitioner· was not obligated to submit, and does not impact Respondents' unilateral and nondiscretionary statutory duty to calculate the total reimbursement liability under Social Services Law § 368-a and pay Petitioner for the amounts owed; (3) Respondents' decades-long course of intentionally or negligently dilatory conduct permits this Court to apply Social Services Law § 368-a as it exlsted at the time that Petitioner incurred the Overburden expenses on Respondents' behalf, without consideration of Section 61, under the special facts exception; (4) Section 61 is not a clarifying amendment, ·but is a substantive deprivation of Petitioner's vested rights to reimbqrsement for Overburden expenses incurred prior to January 1, 2006 that is being retroactively applied; (5) even if the statutory and· regnlatory bases for Overburden reimbursement had been repealed, Petitioner's vested rights to reimbursement must survive pursuant to General Construction Law § 93; (6) Section 61 deprives.Petitioner of due 2 process of law; (7) Respondents' defense based on the doctrine of !aches is barred by collateral estoppel; and (8) Section 61 does not bar Petitioner from recovering for conversion, unjust enric1ment, and constructive trust; WHEREAS, the Court having· heard oral argument of counsel for the parties on December 9, 2013; and · NOW, upon due consideration of all the pleadings and proceedings in this matter and the oral arguments of counsel, it is hereby ORDERED, ADJUDGED AND DECREED that, for the reasons set fmth in the transcript of the December 9, 2013 proceedings before this Court ("Transcript") (attached hereto as Exhibit A), this Court finds that Petitioner's right to reimbursement nuder Social Services Law § 368-a accrued prior to 2006, upon Petitioner's payment to DOH for services provided to overburdened patients for which no local share was owing; and it ii further °ORDERED, ADJUDGED AND DECREED that, for the reasons set forth in the TTanscript, this Court finds that Petitioner's right to reimbursement under Social Services Law § 368-a is a vested right that cannot be extinguished by retroactive legislation; and it is further ORDERED, ADJUDGED AND DECREED that, for the reasons set forth in the Transcript, insofar as Section 61 attempts to deny the County repayment of obligations already accrued, it is unconstitutional; and it is fu1ther ORDERED, ADJUDGED AND DECREE]) thatthe Verified Petition and Complaint is granted in part and denied in part; and it is further ORDERED, ADJUDGED AND DECREED that the determination of Respondents, dated September 4, 2013, purporting to deny Petitioner's claims for reimbursement of the overburden expenses that Petitioner incurred on behalf of Respondents prior.to January l, 2006, 3 pursuant to Social Services Law§ 368-a, solely on the basis of Section 61, is hereby annulled; and it is further . ORDERED, ADJUDGED AND DECREED that, for the reasons set forth in the Transcript, Respondents are directed to forthwith allow Petitionet"s claims for reimbursement and to pay $217,%7.75 to Petitioner within 30 days of service with Notice of Entry of this Order and Judgment; and it is further ORDERED, ADJUDGED AND DECREED that the remaining relief requested in the Verified Petition and Complaint is denied. Dated: Mayville, New York December [/!)._, 2013 4 SO ORDERED, ~,,Adu~ n:Deborah A. Chimes Justice of the Supreme Court 1 2 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF CHAUTAUQUA 3 COUNTY OF CHAUTAUQUA, 4 5 6 7 8 9 Plaintiff Vs. NIRAV R, SHAH, MD MPH, as Commissioner of the New York State Department of Health, and the NEW YORK STATE DEPARTMENT OF HEALTH, Defendants Article 78 Courtrs Decision Kl-2013-1266 December 9, 2013 1 10 Chautauqua County Courthouse Mayville, New York 11 12 13 BE F 0.R E; 14 HONORABLE DEBORAH A. CHIMES 15 16 17 18 AP P E A RAN CE S: 19 20 21 22 23 24 25 CHRISTOPHER E. BUCKEY, ESQUIRE Appearing for the Plaintiff DARREN LONGO, ESQUIRE · Appearing for. the Defendant GERARD F. LINNECKE Senior Court Reporter 1 2 3 ·4 5 6 Court's Decision 2 MONDAY, DECEMBER 9, 2013 CLERK OF COURT: County versus Shah. Counselors, please note your appearances for the Record. MR. BUCKEY: Christopher Bucky from Whiteman, Osterman & Hanna for the County of Chautauqua. MR. LONGO: Darren Longo, Assistant Attorney 7 General, for the respondents/defendants. 8 THE COURT: Alright. You may proceed. 9 (WHEREUPON PROCEEDINGS WERE HAD NOT TRANSCRIBED HERE) 10 THE COURT; Okay. Court's ready to make its 11 decision. The petitioner's motion is granted in part and 12 13 14 15 'denied in part. Section 61 attempts to extinguish the petitioner's vested right to reimbursement of overburden payments under Social Services Law 368(a) retroactively, and therefore is unconstitutional. Petitioner's request 16 for an order compelling respondents' compliance with 17 Social Service Law 368(a) is granted. Petitioner's 18 granted judgment in the amount of $217,967.75 together 19 with statutory interest. Remainder of petitiOnerrs 20 motion is denied. Respondent's cro~s motion to dismiss 21 is denied. Petitioner is to prepare and submit an order 22 in 30 days, and attach a copy of the transcript to the 23 order. Thank you. 24 (PROCEEDINGS CONCLUDED) 25 1 2 3 CERTIFICATION 4 5 I, Ger a.rd F. Linnecke, Senior Court Reporter, do 6 hereby certify that the foregoing is the transcript of 7 Article 78 held December 9, 2013 in the matter of County of 8 Chautauqua Vs. Shah, et al. 9 I further certify that the questions and answers were 10 taken down in stenotype by the said Reporter, Gerard F. 11 Linnecke, and afterwards reduced to typewriting by the said 12 Reporter. 13 I further certify that the proceedings and evidence 14 are contained fully and accurately in the notes taken by me 15 · on the within proceedings, and that this copy is a correct. 16 transcript of th.e same. 17 In testimony whereof, I have hereunto subscribed my 18 hand this 13th day of December, 2013. 19 20 21 22 Senior Court Reporter 23 24 25 Matter of County of Chemung v Shah Index No. 2013-1849 23-NDV-2013 00:29 From:CUM CO CLERK 6072422448 To: 15184877777 •. PRESEN'.l'; HON. ,JUDITH F. O'SHEA SUPREME COURT JUSTICli'. STATE OF NEW YORK .SUPREME COURT: COUNTY OF CHEMUNG Jn the Matter afth.e Application ofthe Chen:mng Coimty, Petitio1wr, For a JudgtnIkheld in and for the Sixth Judfoial ))Jstrict, at 1he Hazlett Buflding, in the County of Chemung, -Elmira, New York, heard <:>n the 1 o•• day of ·ootobe( 2013. DECISION & ORDER INDEX#:.'!013-1849 RJI #2013..0535-M of the New York Slate Depattm"llt ofHoolth llnd The New York State Department of Health, Respondemt~. JUD!T!J F. O'SHll!A,, J§C FINDINGS QF FACT In a Notice of Petition dated August 23, 2013, petitioner seeks to OMufil respondents' dotenninatlon denying thelt claims for reimbursement of the overburden expenses Jncu1'r6d prior to January 1, 2006 under Socii1l Seryiw• Law§ 368-a as arbitrary aud capric,ious and/or affected by an error of law. Petitioner also seeks the fullowing relief: compelling respo1tdentl to calculate the total reimbuw~mellt due; i;!oclaring Section 61 of Part D of Chaplet 56 of the Laws of2012 unconstitutional; damages in the runount of $606.203.31; imposing a constructi.ve trust over tlle funds respo'-\dents were obligated to reimburse, and; costs, disbltrsements BJ;1d attorney :fees. 23-MOV-2013 00: 29 From: CUM CO CLERK 6072422448 To:i5184877777 Itum August 31, 2011 Decision and Order issued by this Couit, petitioner's application to oompel reird Department and Fourth Department have expressly affirmed such determinations whiob. oompelled relinbursam<'-nt. See, Matter 9f C,QmlSJ'_Qf_t;{\, J',,awrence v. ~. 81AD.3d212 (3" Dept. 2011); Matter OfCount\I of Niagara v. ~ 83 A.D.3d 1506 (4"' DeJ?I. 2011); Matter ofCounlV of Niagara v. ~. 79 A.D.3d 17()2 (3'" Dept. 2010); Matter of f'..ountv of Herkimer v. ~ 60 A.P.3d 1.456 (4'' Pepi. 2009); Matter ofCoJ!.!)ty ofNi•((Ar!i v. Daines, 60 A.D.3d 1460 (4'" Dept. 2009). See, also Matter of CourdyofSt. Lawrenoov. Shah, 95 A.D3d !548 (3"' Dept. 2012), wherein the Court stated that respondents c;ould not retroactively avoid thelt statutory reimbursement obligation to CQUUties under Social Services Law § 368-11-. Section 61 of Part D of Chapter 56 of th" Laws of2012 was passe\l by the Legislature as part of the 2 012 Executive Budget, which jltov\ded that "notwithstanding the provl$ions of section 368-a oftbe social services law ot·uny other oon""1yprovision of law, no reimbursement shli!l be made for ~<'1¢ial services districts' claims submitted on and after 1he e!Thctive date of this paragraph, for district cxpenditmw iucumxl prior to JJII:luary 1, 2006.'' Respondents have relied on Section 61 to deny overbm:den reimbursement, whic11 lias spurred recent litlga!lou, identical to the action at bO', that has resulted in Courts expressly statlug that Section 61 does not bar reimbursemont·. See, Matter of County ofNiagam v. Sbah. et al., (Sup. Ct., Niagara Co., Nugent Panepinto, J .. Index No. 149492·2013, June 18, 201:.l); Matter of Countv of St. lawref!C" v, lilifil!, (Sup, Ct., St. Lawrence Co,, Demarest, J., Index No. 140712, July 31, 2013); Mattey of County 9fSt. LawrePQ§ v. fillllh, (Sup. Ct., St. Lawrence Co., Demarest, J,, Index No. 140998, July 31, 2013); Matter of County of St. Lawrence v. Shal1, (Sup, Ct., St. Lawrence Co., Demar"'lt, J., Index No. 0141656, August 1-013). Respond1>nts have submitted a verified answer to the petit.ion, along wiih a motion. for summary judgment on the declaratory judgment claims. In sum attd substance, respoi:idents maintain that Section 61 is!'. clarifying amendment for !he applloatfr>n of the Medfoaid Cap Statute which permfosiblycuts off petitioner's overllui:den claims retroactively. Petitioner has submitted repJypapers. CONCTJ!SIONS OF !•t\. W It ls clear that the same set of facts and legal anal.Y$1s are present iJJ this action as in the recent actions iu Matter of Countv ofNia1rnm v. Shab, et a]., (Sup. Ct., Niagara Co., Nugent Panepinto, J., Index N°<;>. 149492~2013, Jime 18, 2013); M;i.ttm: of County of St, Lawren£!!V, Shi!!\, (Sup. Ct., St. Lawrence Co., Demarest, J., Index No. 140712,July 31, 2013); Matter of. County of St. LawrenC<; v. filli!ll, (Sup. Ct., St. Lawrence Co., Demarest, J., ):ndex N'o. 140998, July 31, 2013); Matter of County ofSt. Lawrence v. fillru;, (Sup. Ct., St. Lawrence Co,, Demarest, J., Index No. 0141656, August20lS), and the Court sees no reason to depart . tberefrom. Based upon !hes<> holdings, and the entire· record before The Court, includillg but not 23-l,IOV-2013 00:29 From:CUM CO CLERK 6072422448 To:151B4B77777 i < limited to the reasons as set forth in petitioner's papers, as well as the holding In Mlittey of County of St. Lawrence v, Shah, $Upra, respondents cannot rely on Section 61 tq deny petitioner'.s ctalm for overburdfpetitioiw's reiraburnement claims ls hereby annulled a.! arbitrary, capricious and/or affected by all error oflaw; and it is further ORDERED, that the petition is hereby granted, to the ext~nt that respondents are hereby directed.to allow petitioner's claims for rehnbursement of $606,203,3 J, within thlrtY (30) days of entry of this Decision and Order; and it is further ORDERED, that respond COUNTY OF JEFFERSON, Petitioner-Plaintiff, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules and a Declaratory . Judgment Pursuant to Section 3001 of the Civil Practice Law and Rules -against- NIRAV R SHAH, M.o., M.P.H., as Commissioner of the New York State Department of Health and THE NEW YORK STATE DEPARTMENT OF HEALTH, Respondents-Defendants. DECISION lndex No. 2013-1956 RJI No. 22-13-0863 The Petitioner, County of Jefferson ("County"), seeks to annul the determination of Respondents, Commissioner of the New York State Department of Health and the New York State Department of Health, or DOH, dated September4, Nancy Rose Stormer, PC 315-735-9392 p.3 .~ 2013, which denied Petitioner's claim for reimbursement of overburden expenses that Petitioner incurred on behalf of Respondents prior to January 1, 2006. It seeks judgment pursuant to Article 78 of the CPLR which provides an expeditious and · essentially uniform procedure for judicial review of challenges to actions, or inaction, by agencies and officers of state and local government. The law is well- settled that a court may not disturb an administrative decision unless the agency's action was arbitrary and capricious, in violation of lawful procedures or made in excess of its jurisdiction. Matter of Schatz v. Department of Consumer Affairs of » the City of New York, 177 AD 2d 324, 326 (1991). Petitioner believes that the parties have. a close relationship arising from their joint administration of the New York State Medical Assistance Program. New York's counterpart to the Federal Medicaid program. The Progra·m was established to ensure that certain medical assistance recipients receive the medical care that they need. Petitioner urges that Respondents have an array of fiduciary obligations, including full disclosure, fair dealing, the providing of instruction and training on all aspects of medical assistance laws, regulations, practices, and procedures. Even accepting this premise to be accurate, a significant issue arose concerning the obligation of the DOH to reimburse Petitioner and other counties for a category of Medicaid-type expenditures prior to a certain date. This issue appeared to have been resolved in the favor of the counties during a series of 2 Nancy Rose Stormer, PC 315-735-9392 p.4 judicial decisions but then emerged when the Legislature enacted what wffl be referred to as Sectfon 61 of the 2012-2013 budget bill submitted by the Governor of the State of New York. Section 61 is geared to reverse the judicial determinations requiring the payment of pre-2006 overburden payments by the counties, with an April 1, 2012 deadline established for the submission of claims. In this regard the Petitioner directs the Court's attention to Social Services Law §368-a entitled "State Reimbursements''. Petitioner contends ,, that this statute imposes a mandatory obligation to reimburse it for expenses it incurred in relation to the treatment of mentally disabled recipients. This reimbursement is labe.led "overburden expenses." Apparently on June i2, 2013, Petitioner submitted claims for reimbursement of overburden expenses to the Respondents in the amount of $114,501.50. These claims were rejected in September 201~ because they related to overburden expenses that were incurred prior to January 1, 2006. Petitioner contends that Respondents are mandated to pay these claims. The Respondents not only contest the contentions raised by the Petitioner but moved for summary judgment to dismiss the claims set forth in the Verified Petition and Complafnt. The. Respondents perceive the proceeding commenced by Petitioner to be a hybrid mechanism challenging the rulfng of the 3 Nancy Rose Stormer, PC . 315-735-9392 DOH as to the unconstitutionality of Section 61, a declaratory judgment, an arbitrary and capricious determination, subject to mandamus to compel, and in· violation of certain State law contract and tort provisions. p.5 Petitioner believes that it, like other counties throughout New York State, is responsible pursuant to the Medical Assistance Program for providing medical assistance payments to eligible patients_ Petitioner further believes that the Legislature had eliminated a former obligation of each county to pay its fifty percent cf the Medical Assistance costs. The Legislature enacted what Petitioner describes as "hold harmless" provisions requiring Respondents to reimburse each county for the costs inc.urred for assistance to certain indigent, mentally disabled persons. Petitioner directs the attention of the Court to Social Services Law §368-a(1)(h) which it interprets as providing counties with full reimbursement for their "overburden expenses". Petitioner contends Section 61 ofthe Budget Bill could not nullify the statutory provision that the county is obligated to pay these ove.rburden expenses in the first instances, jointly administer the medical assistance program with Respondents, then Respondents reimburse each county for its payments of these overburden expenses. The Respondents explain that, with regard to fee-for-service Medicaid, medical providers submit claims for payment to the fiscal agent of the 4 Nancy Rose Stormer, PC 315-735-9392 p.6 Social Services district after the service is provided. The district processes and pays valid claims for payment In funding medical expenditures the Federal Government contributes approximately fifty (50%) percent as its Federal Medical Assistance percentage, or "FMAP". Prior to January 2006, Social Services districts, with certain exceptions, paid approximately fifty {50%) percent of the non-Federal share, or twenty-five (25%) percent of the ioial Medicaid expenditures, its "local share". In this regard, nevertheless, Social Services districts were to be fully reimbursed for certain expenditures prior to January 1, 2006, for local shares they "'"· initially paid for services provided to certain mentally disabled recipients who met a criterion for so-called "overburden requirements." Respondents erroneously believed that subsequent "CAP" legislation in the year 2010 cut off the opportunity of counties to seek such pre-2006 reimbursement arid believe that Section 61 definitively does that since April 1, 2012. Petitioner recalls the so-called cap methodology adopted in 2005 which was to use 2005 as a base year for a county's total health care expenditures for county-charged incidents and· then guarantee that future expenditures did not increase unreasonably. The Petitioner urges that the Medicaid cap statute of 2005 altered the prior funding formula by, in effect, limiting each county's liability to the net Medical Assistance expenditures it made in 2005, with adjustments for inflation and other so-called trend factors. The Petitioner further interprets the 2005 5 Nancy Rose Stormer, PC 315-735-9392 p.7 Medicaid cap statute as incorporating the pre-existing hold harmless provisions prospectively while leaving them unchanged retrospectively, with.a legislative intent of providing counties with relief from the financial burdens imposed upon them by Medicaid. The effective date of this statute is reported to be January 1, 2006, but Petitioner did not consider that legislation to have any negative impact on State liability for services provided prior to January 1, 2006. The State of New York disagrees. The Respondents believe that as of January 1, 2006, the Medicaid cap brought needed fiscal relief to Petitioner and all Social Services districts by providing stability, certainty and predictability to their Medicaid costs. The Respondents assert that prior thereto Social Services districts initially paid their full local shares of the State's Medicaid payments to medical providers. The State then identified those Medicaid recipients who were mentally disabled under the applicable overburden criteria and, for those who qualified, issued quarterly reimbursement payments to Social Services districts. However, the DOH interpreted this cap statute as serving as a fixed ceiling for the counties' Medicaid obligations to the extent that this statute barred the subsequent submission of any claims for overburden expenses incurred prior to the cap statute. The DOH believed that no pre-January 1, 2006 liabilities had to be paid to the counties after January 1, 2006. 6 Nancy Rose Stormer, PC 315-735-9392 p.8 .. ~ ·-·- The Petitioner interprets the Medicaid cap statute of 2005 as continuing Respondents' responsibility to reimburse the counties for One Hundred (100%) percent of the counties' focal share of Medical Assistance expenses paid prior to January 1, 2006 on behalf of overburden-qualifying disabled persons. Respondents believe that effective January 1, 2006 Social Services districts remain responsible for paying their local shares of Medicaid expenditures but the amount of each district's local share is fixed or capped pursuant to the Medicaid cap statute of 2005. This special proceeding/hybrid lawsuit concentrates on the limited Medicaid program involving these overburden expenses. Respondents contend that the Department of Healt.h can no longer reimburse Social Services districts for overburden expenses formerly authorized by §368-a(1 )(h) of the Social Services Law. While a district's local share of total Medicaid expenditures-its Medicaid cap amount-could increase from one state fiscal year to the next, it would only do so in accordance with the fixed and. modest percentage rate increase that the Medicaid cap statute of 2005 supposedly prescribed. The Petitioner asserts that in April 2005 the Respondents o_rdered the Office of Temporary and Disability Assistance to suspend any processing of all overburden reimbursements to the counties, even those Incurred prior to the 7 Nancy Rose Stormer, PC 315-735-9392 p.9 ----~. January 1, 2006 effective date of the Medicaid cap statute. The DOH consistently argues that any such activity, or inactivity, was in accordance with the language and spirit of the Medicaid cap statute. The Petitioner, and other counties, successfulfy challenged this argument in the judicial system. As a consequ!'lnce, the subject Section 61 of the 2012 Budget Bill became a vehicle by which DOH seeks to enforce its argument through a purported override of the express language of Section 368-a(1)(h)(i) enacted b&ck in 2005 as part of the Medicaid cap statute. The Respondents surmise that despite what they categorize as the Medicaid cap's unarguable benefits to Social .service districts, some longed for certain aspects of the pre-cap world, such as the routine receipt of overburden expenses made pursuant to §368-a(1 )(h)(i). It is important to note early on that it was the obligation of DOH to review the County's quarterly requests and pull out the cases qualifying for overburden expenses. The County audited itself and discovered instances of reimbursement which DOH neglected to identify prior to the effective date of the Medrcaid cap. Petitioner in June of 2013 did not submit new "claims" for services rendered but pointed out to DOH specific services rendered ·prior to January 1, 2006, for which it had.not yet been reimbursed. DOH hoped that the amendment of the Medicaid cap statute would "' Nancy Rose Stormer, PC 315-735-9392 p, 10 resolve the disagreement between the parties. This 2010 amendment provides that "the State/Local Social Services district relative percentages of the non-Federal share of Medical Assistance expenditures incurred prior to January 1, 2006 shall not be subject to adjustment on or after July 1, 2006." The Petitioner believes that relying upon this language of this 201 O amendment the Respondents began to claim that any reimbursement to a county for its overburden expenses would alter that county's "percentage of the non-Federal share" for Medical Assistance expenditures made prior to January 1, 2006, in violation of the 2010 amendment. DOH had statutory language in the 201 o amendment which it assumed ended any discussion about services prior to the enactment of the Medicaid cap statute. Enter the Courts. The Petitioner submits that there are judicial precedents rejecting the interpretation of the Respondents concerning the impact of the Medicaid cap statute claims for services rendered prior to January 1, 2006. The Courts appear to have applied the doctrine that. under New York law, retroactive application is not favored. by Courts and statutes will not be given such construction unless the language expressly or by necessary implication requires it. Matter of The County of St. Lawrence v. Daines, 81 AD 3d 212, 214 (2011). The Fourth Judicial Department concluded that the DOH improperly applied the Medicaid cap statute retroactively to claims by a county for reimbursement for services rendered prior to the effective date of the statute. Matter of County of Herkimer v. Daines, 60 AD 3d 1456, 1457 9 Nancy Rose Stormer, PC 315-735-9392 p,11 (2009). As noted, the Petitioner refers to a number of judicial decisions which it believes flatly reject Respondents' position that the Medicaid cap. statute had some effect cm the entitlement of a county to such reimbursement and the Medicaid cap statute could not retroactively deprive the counties·of their statutory entitlement to reimbursement for overburden expenses. The gist of these judicial decisions is that these' courts saw, in reviewing the plain language of the 2010 amendment to Social Services Law § 368-a, that there is no reference to overburden and/or reimbursement or language that otherwise expressly or impliedly infers that the Medicaid cap legislation can be retroactively applied to defeat the statutory right of a county to payment. The Courts held that §368-a remains in full force and effect after passage of the 201 O amendment. The DOH then oversaw the drafting of language for inclusion in the Governor's budget proposal for State fiscal year 2012-2013 which DOH thought would clarify the intent of the Medicaid cap statute. In other words, ifthe Courts did not perceive the 201 O amendment as shuttin9 off pre-2006 county seNfces reimbursement, this language of the budget bill would do so expressly. Within this separate and distinct budget bill the drafters sought to insert favorable language replacing Social Services Law §368-a(i }(h)(i) without 10 > Nancy Rose Stormer, PC 315-735-9392 p.12 actually replacing the language of the original Medicaid cap legislation. Without · changing the Social Services Law there was included in the budget as Section 61 of Part D of Chapter 56 of the Laws of 2012: "Notwithstanding the provisions of Section 368-a of the Social Services Law or any other contrary provision of Jaw, no reimbursement shall be made for Social Services districts' claims submitted on and after the effective date of this paragraph, for district expenditures incurred prior to January 1, 2006, including, but not limited to, expenditures for services provided to individuals who were eligible for medical assistance pursuant to section three hundred sixty-six of the Social Services Law as a result of a mental disability, formerly referred to as human services overburden aid to counties .. L 2005, ch. 58, pt C. Section 1, subdivision (h), as added by L 2012, ch. 56, pt. D, Section 61." The sensitivity that this Section 61 engenders is observable in Petitioner's characterization of it as a retroactive rewrite of the 2005 Medicaid cap to attempt to extinguish vested rights. Petitioner views a dark side to the story of the fiscal relationship between the State and New York's counties involving (a) fiscal wrongdoing or plain incompetence by DOH, (b) a subsequent attempted cover-up or refusal to review recent transactions by DOH, and (c) the attempt, in the 2012 executive budget, to finally, as is flatly admitted by Respondents, "wall off' liabilities owed to counties. The Respondents propose that the purpose of Section 61 was to 11 Nancy Rose Starmer, PC 315-735-9392 p,13 -~- address the litigation that Social Services districts had commenced to obtain overburden reimbursement for pre-cap years. This Section 61 certainly reflects, and expressly enunciates, the position taken by DOH since January 1, 2006. However; can DOH enforce a position which has been rejected by the judicial system? The Petitioner expresses its view that Section 61 of the 20_12 Executive Budget Law, as enacted, cannot accomplish the objective of this newly- minted immunity claim without repudiating vested debts. Petitioner emphasizes that the constitutional, statutory and common law mandates of New York law do not permit the repudiation of debt. Petitioner charges Respondents with owing debt which it has made no effort to calculate or pay and which "walling off' is not a recognized method of extinguishment In other words, can a person, even the State of New York, unilaterally declare that he or she no longer desires to pay an existing. debt and further declare that such debt is discharged? Respondents contend that Section 61 lends stability and predictability to the State's budgeting process by walling off liability for Medicaid expenditures that, if incurred, were incurred a long time ago. Respondents consider that by asserting Section 61 as a defense to payment they are merely seeking finality and the cessation of an open-ended, unknown and unknowable future financial liability. They suggest that Petitioner has had ample opportunity both to ascertain whether it 12 Nancy Rose Stormer, PC 31 5-73 5-9392 p.14 --- had inadvertently not received reimbursement for services provided to overburden eligible recipients prior to January 1, 2006, and to submit reimbursement claims by the deadline of April 1, 2012. Respondents urge that the fact that Section 368-a remains on the books is immaterial to the current reimbursement claim of Petitioner. However laudable it is for the State to seek to establish a plan for economic stability, can tfiis be accomplished by unilaterally writing off previously existing legitimate economic obligations, cancelling out the past to make April 1, 2012 the first day of State economic responsibility? This does not appear reasonable or appropriate. The Court must further respectfully disagree with Respondents that the fact that Section 368-a remains on the books is immaterial. This so-called clarification was not enacted as an amendment to Section 368-a. Instead it was tucked away within the confines of the budget bill. Notwithstanding the attempt to modify the language of an existing statute, the language of Section 368-a(1)(h)(i) reads: "Beginning January first, nineteen hundred eighty-four, one hundred per centum of the amount expended for medical assistance for those individuals who are eligible pursuant to section three hundred sixty-six of this article as a result of a mental disability as determined by the commissioner in consultation with the commissioner of the office of mental health and the commissioner of the office of mental retardation and developmental disabilities and with the approval of the director of the budget after first deducting therefrom any federal funds properly received or to be received on account thereof." 13 ,,. Nancy Rose Stormer, PC 315-735-9392 p.15 Section 61 was not incorporated into a proposed amendment of Social Services law §368-a, voted out of the appropriate committees of the Senate and Assembly, placed upon the desk of members of the Assembly and Senators, and voted upon as an amendment. Instead it was tucked into the budget bill as one of its multiple sections. This was not sufficient to effectively amend §368-a. Consequently, as previous!y noted, the June 13, 2013 claims for overburden expenses and the September 2013 rejection thereof by the Respondents are the crux of the Petition. Petitioner further urges that the subject Section 61 must also be read along with General Construction Law §93 which provides: "The repeal of a statute or part thereof shall not affect or impair any act done, offense committed or right accruing, accrued or acquired, or liability, penalty, forfeiture or punishment incurred prior to the time such repeal takes effect, but the same may be enjoyed, asserted, enforced, prosecuted or inflicted, as fully and to the same extent as if such repeal had not been effected." Dating back to 1909 this provision establishes the pHnciple that an accrued right under a statute continues beyond the repeal of that particular statute. Matter of Lovinella, 166 AD 460, 463-464 (1915). In the first cause of action, Petitioner seeks an order and judgment 14 Nanoy Rose Stormer, PC 315-735-9392 p.16 pursuant to CPLR 7803(1) compelling and directing Respondents to comply with the mandatory duty enjoined upon them to reimburse Petitioner for the overburden expenses that Petitioner incurred prior to January 1, 20G6. The extraordinary remedy of mandamus will look only to compel the performance of a ministerial act, and only when there exists·a clear legal right to the relief sought. Matter of Myron v. Nelson, 259 AD 2d 549 (1999). Prior to April 1, 2012 the Courts had declared that the payment of these overburden expenses back to the counties was a ministerial act. Has Section 61 changed this reality as Respondents contend it has? This Court respectfully does not believe that it does. With regard to relief in the nature of mandamus to compel the payment of claims, Respondents point out the language of Section 61 requiring them not to pay these claims. Respondents assert that at the time of denial Section 61 was, and is, good, viable, and constitutional and that payment should not be made. Respondents acknowledge that all previous defenses they raised regarding · this reimbursement issue were rejected by the Courts so 1hat Article 61 is a fresh attempt to prevail. In other words, if there was no Section 61 preventing reimbursement, there would be a judicial mandate to reimburse. The Court has previously referred in detail to the conflicting interpretations of the parties with regard to Section 61. The Petitioner is hopeful that 15 Nancy Rose Stormer, PC 315-735-9392 p.17 this Court will adopt the line of thought of the Supreme Court in Niagara County v. Shaw, which accepted the reasoning of the Court of Niagara, and rejected the defenses asserted by Respondents based upon Section 61. It treated the Petitioner's claim for mandamus under Social Services Law Section 368-a as it existed at the time that the County incurred the overburden expenses, annulled the reimbursement denials by Respondents, and directed Respondents to pay !he claims. Consequently, the County of Jefferson stresses that §368-a expressly granted reimbursement at the time this county made the Medical Assistance ,,. · payments resulting in a clear right to receive reimbursement. The Court concurs with Petitioner that Respondents have a mandatory duty to reimburse the expenses. Petitioner also contends that it had no obligation to submit claims for overburden expenses since it was Respondents' statutory obligation to calculate the total reimbursement liability in accordance with §368-a. Petitioner thereby concludes that Section 61 does not alter Respondents' underlying obligation to calculate the total reimbursement liability and pay what is owed. In essence, Petitioner is trying to explain that it never has been, nor is, a responsibility of a county to submit claims. The State is supposed to have a computer system with codes to identify these overburden payments when received soon after the County has made payment. Petitioner is merely asserting that the right to reimbursement accrued when the County made payment prior to January 1, 2006, and the County currently is looking 1<5 Nancy Rose Stormer, PC 315-735-9392 p.18 ---. for recoupment of what the County determined, through an audit, that the State should have paid. The Petitioner has overburden expenses which the State should have paid prior to January 1, 2006 but were overlooked or not appropriately identified. This view of the Petitioner appears accurate. In the second cause of action, Petitioner seeks a declaration that Section 61 is unconstitutional, invalid, null and void. CPLR §3001 provides that a Court may render a declaratory judgment having the effect of a final judgment as to the rights and other legal relations of the parties to a justifiable controversy whether or not further relief is or could be claimed. A judicial declaration of the rights of the parties is sought for the purpose of guiding their future conduct. Lynch v. Bailey, 279 AD 650 (1951, affd 304 NY 669 (1952). The Petitioner asserts that Section 61, deprtves it of a vested rig ht to reimbursement for these overburden expenses without due process in violation of Article I, Section 6 of the New York Constitution. Petitioner asserts that Sectlon 61 provides Petitioner with no grace period or any opportunity to collect unpaid expenses before purportedly permanently depriving Petitioner of its vested right to reimbursement. The Court agrees with the Petitioner. The third cause of actiori also asserts that Petitioner is entitled to a 17 Nancy Rose Stormer, PC 315-735-9392 p.19 declaration that Section 61 is unconstitutional, invalid, null and void. Petitioner reasserts that it is entitled to due process of law under Article I, Section 6 of the New York State Constitution in that no person shall be deprived of life, liberty or property without due process of law. Petitioner believes that it has a constitutionally protected and statutorily guaranteed vested right to reimbursement. Petitioner further asserts that DO H's retroactive application of Section 61 to deny Petitioner's claims for reimbursement of overburden expenses that Petitioner incurred on behalf of DOH prior to January 1, 2006 was wholly without legal justification. The Court agrees with the Petitioner. · The fourth cause of action also seeks a declaration that Section 61 is unconstitutional, invalid, and votd. Petitioner urges that it has a constitutionally protected and statutorily guaranteed vested right to the requested reimbursement. Petitioner sets forth that Respondents collected from Petitioner payments for the expenses for treatment of overburden-qualified patients so as to have a proprietary interest in the funds so collected. Petitioner continues that these funds were raised by real property and sales taxes which became the property of Petitioner since they were obtained without any legal basis by Respondents and in contravention of State constitutional and statutory provisions which guarantee Petitioner's vested rights. Petitioner further cites Section 11 (4) of the New York Statute of Local Government for a rule that the State is prohibited from enacting a law that repeals, diminishes, 18 Nancy Rose Stormer, PC 315-735-9392 p,20 --~ impairs or suspends a right or power relating to the property of local government Petitioner also cites Article IX, Section 2(b)(1) of the New York Constitution and Section 2 of the Statute of Local Governments to support the theory that Petitioner's proprietary interest in the funds collected by Respondent_s could not be repealed, diminished, impaired or suspended during only one legislative session. Respondents contend that such Sections 2 and 11 (4), along with Article 1X, Section 2 (b)(1)). are not germane to the constitutionality of Section 61 since they only apply to the State legislature when dealing with the property, affairs or government not of State concern but only purely local concern. Wombat Realty Corp. v. State of New York, 41 NY 20 490, 491. (1977). Floyd v. New York State Urban Development Corporation, 33 NY 2d 1, 6-7 (1973). They contend that a strong presumption of constitutionality attaches to legislative enactments. Matter of Wolpoff v. Cuomo, 80 NY 2d 70, 78 (1992). Seventy years ago, the Court of Appeals proclaimed "that a statute can be declared unconstitutional only when it can be shown beyond reasonable doubt that it conflicts with the fundamental law, and that until every reasonable mode of reconciliation ot' the statute with the constitution has been resorted to, and reconciliation has been found impossible, the statul.'6 will be upheld." Matter of Fay, 291 NY 198, 207 (1943). Respondent believes that the chief argument of Petitioner is that 19 Nancy Rose Stormer, PC 315-735-9392 p.21 ~- Section 61 impairs its vested right to reimbursement of pre-cap overburden claims. rt further believes that such a claim is founded on the false premise that Article 61 confers some new authority on DOH that was not previously contemplated or permitted under the existing cap law. Respondents refer to the opening words "to clarify" in Article 61 and to its legislation which is a clarifying amendment to provide an explanation of the rights and obligations already codified under the Medicaid cap statute. Respondents urge that the Petitioner has not satisfied its heavy burden of proving unconstitutionality, and that this amendment was intended to clarify what DOH was already authorized to do. Held v. State of New York Workers Compensation Board, 85 AD 3d 35, 41 (2011). Respondents find the law the law clear that this amendment was merely a Clarification and did not create a new r.ight or affect a pre-existing right. Matter of Marino S., 293 AD 2d 223, 228 (2002). They contend that the cap statute required clarification in light of adverse court decisions which mandate.State payment of pre-cap overburden expenses. It is clear to them that the Legislature enacted Section 61 in an attempt to once and for all clarify or remediate the cap statute so that it unambiguously captures the original intent prohibiting post-cap reimbursement for pre-cap overburden expenses. This so-called clarification, nevertheless, was to remedy the judicial rejection of what was submitted by DOH to be the intended state of law. This Court must respectfully disagree with 20 Nanoy Rose Stormer, PC 315-735-9392 p.22 Respondents. We find that Social Security Law §368-a gave Petitioner an immediate property interest in the income attributable to the reimbursements. If Petitioner's rights to reimbursement vested as soon as the medical payments were made to DOH, Petitioner insists that it had a vested property right to reimbursement which the Legislature lacked authority to abolish. This Court concurs with this logic and reasoning. Highlighting Section 61 in actuality as a clarifying amendment, Respondents propose that the Court must apply a rational basts test in analyzing this legislation for constitutionality. Respondents consider that standard of review an example or pattern of judicial restraint. Port Jefferson Health Care Facility v. Wing, 94 NY 2d 284, 290 (19g9). On a rational basis review a statute will be upheld unless the disparate treatment is so unrelated to the achievement of any combination of legitimate purposes that it is irrational. Affronti v. Crosson, 95 NY 2d 713, 719 (2001 ). Respondents herald Section 61 'as rational in that it provides the State with critical economic certainty in its administration of the Medicaid program, promoting the State's important interest in closing its books on undisclosed old liabllities. However, this argument overlooks the reality that it was DO H's computer system which failed to identify the overburden expenses prior to January 21 )> Nancy Rose Stormer, PC 315-735-9392 p.23 1, 2006. There appears to be a consensus that where legislation has retroactive effects, judicial review does not end with the inquiry generaily applicable to economic regulation as to whether the legislation has a rational basis. Instead, the courts must balance a number of factors, including fairness to the parties, reliance of pre-existing law, the extent of retroactivity and the nature of the public interest to be served by the law in order to accomplish a determination whether the rights affected are subject to alteration by the legislature. Alliance of American Insurers v. Chu, 77 NY 2d 573, 586 (1991). The Court does not concur that this consensus is applicable to the manner by which Section 61 came into being or its devastating impact upon vested rights. Nevertheless, the Court shall evaluate these points. Maintaining a comprehensive legal approach, the Respondents continue that even if considered to be a retroactive amendment Section 61 must be deemed constitutional under a balancing test. The State's power to alter the rights and obligations that attach to completed transactions is not as broad as its power to regulate future transactions. Allianc;e of American Insurers v. Chu, 77 NY 2d 573, 585 (1991). Nevertheless, for a significant period of years there has been evolving more candid considerations of existing vested rights as well as a less inflexible view 22 "' Nancy Rose Stormer, PC 315-735-9392 p.24 . ~--. of the right of the legislature to pass retroactive legislation. Matter of Chrysler Properties, Inc. v. Morris, 23 NY 2d 515, 518-19 (1969). Consequently, while there is a persisting aversion to retroactive legislation generally, New York has noted that modem cases reflect a less rigid vfew of the legislature's right to pass such legislation and more candid consideration-on a case-by-case basis-of the various policy considerations upon which the constitutionality of retroactlve legislation depends. Matter of Hodes v. Axelrod, 70 NY 2d 364, 371 (1987). · The Respondents respectfully submit additional factors which they interpret as affirmatively weig liing in their favor. Section 61 by its plain language does address overburden expenses and the State's obligation to pay them. These additional factors do not shift the balance in their favor. Even applying a balance test the result is not favorable to the Respondents. A positive aspect for a balancing of factors espoused by Respondents is its fairness to all parties. Respondents have outlined the need for stability and also refer to the prospect of counties double dipping.Into Meclicald funds while the State taxpayers pay the counties twice for overburden expenses in the nature of a credit for the 2005 base year and then again on the reimbursement issue. The benefits to the counties include a benefit of paying the lesser amount under the cap than they owe under the cap calculation or what a county would have owed under 23 Nancy Rose Stormer, PC 315-735-9392 p.25 ~. the old calculations; overburden expenses were already reduced from each county's 2005 base year so as to reduce the county's Medicaid cap amount, its local share; the cap statute of 2005 protects the counties from overpayment in the event that additional Federal monies become available to the State; the county's own fiscal certainty from year to year; indemnification by the State in the event the Federal government were to disallow Federal financial participation for Medicaid. Respondents calculate that this Petitioner has saved more than $4.4 million due to the advent of the cap between fiscal years from 2005-2006 through 2011-2012. The affidavits supplied by Petitioner outline a long history of questionable behavior, or lack of behavior, by the State. Petitioner refers to a history of the dark side of the State in the program in question. Furthermore, the Respondents are not actually highlighting the fairness of Section 61 but the fairness of the cap created back in 2005. Accordingly, Respondents consider that any claim by Petitioner that it relied upon the preexisting Jaw to its detriment must be discounted by the fact that its reliance was based upon a misinterpretation of the law, underwhich it enjoyed a windfall. Petitioner is believed to have enjoyed more than thirteen million dollars in benefits from the cap, plus credit of almost $2.8 million for overburden reimbursement in its 2005 base year, while simultaneously receiving nearly seven 24 Nancy Rose Stormer, PC 315-735-9392 p.26 hundred fifty thousand ($750,000.00) dollars in pre-cap overburden reimbursements. The Courts have ruled, however, that there was no such misunderstanding, or windfall. Section 61 was an attempt to establish the defenses to reimbursement rejected by the courts and deny Petitioner any judicial review of Respondents' denial of reimbursement Regarding the extent of retroactivity, the Respondents consider Petitioner to have been on notice of Respondents' interpretation of the cap statute as prohibiting overburden reimbursements since approximately 2009, when DOH first riajected its claims and asserted the cap as a defense. Respondents further contend that Petitioner should have submitted its claims for reimbursement a long time ago using the reports and data that DOH made available to Petitioner and other districts regarding overburden expenses. In other words, Petitioner had ample notice to submits its pre-cap overburden claims by April 2012 or forfeit reimbursement. Respondents submit that these factors mitigate against a finding of retroactivity and tip the balance further in favor of Respondents. The Petitioner has certainly been aware for a period of time about Respondents' legal defenses but these defenses had appeared prior to April 1, 2012 to be unsupportive or realistic. As io the issue of timely filing, we concur with Petitioner that it could not file until it detenmined that an original entitlement was 25 Nancy Rose Stormer, PC 315-735-9392 p,27 overlooked or disregarded. The Respondents acknowledge that on balance the public interest to be served by Section 61 tips decidedly in favor of Respondents and the State taxpayer. Respondents refer our attention back to the litany of benefits for Social Services districts listed in its supporting affidavits and closing papers. Respondents then predict a devastating effect upon the State's administration of the Medicaid program if Section 61 is not upheld and implemented. Again these benefits stem back to the 2005 cap-statute rather than to Section 61 which came into existence April 1, 2012. The balance of public interest is that counties be paid whatthey are owed. Respondents do not view any violation of due process rights in either the enactment or implementation of Section 61. Responde;rnts consider a retroactive statute that is. clarifying in nature to satisfy constitutional due process concerns where, as here, it shows that the retroactive application of the legislation is itself justified· by a rational legislative purpose. Respondents also repeat that there was notice and a full opportunity over the years to submit its antiquated overburde,n claims; bordering on \aches. Again, the Court respectfully disagrees with the Respondents. 26 Nancy Rose Stormer, PC 315-735-9392 p.28 The fifth cause of action earls for an order and judgment awarding Petitioner the sum of $114,501.50, plus statutory interest. In this regard Petitioner charges that Respondents are currently unlawfully retaining Petitioner's property and/or improperly interfering with Petitioner's right to reimbursement. Petitioner asserts that Respondents have refused to reimburse Petitioner for these overburden expenses. In this regard, the Petitioner outlines. the act of conversion as the unauthorized assumption and exercise of the right of ownership over goods belonging to another to the exclusion of the owner's rights. Thyroffv. Nationwide ,. Mutual Insurance Company, 8 NY 3d 283, 288-89 (2007). As referenced above, the thrust of this cause of action is that instead of returning the reimbursement funds to Petitioner, as required, the Respondents have improperly retained the funds for their own benefit Petitioner believes that it has a possessory right or interest in the funds and Respondents' dominion over these funds or interference with these funds is in derogation of Petitioner's rights. Colavito v. New Yqrk Organ Donor Network, Inc., 8 NY 3d 43, 50 (2006), The Court finds this cause of action to be innovative but does not believe that it can be applied against the State of New York or a State agency. A sixth cause of action seeks a judgment for that $114,501.50, plus statutory interest, as wrongly retained funds to which Petitioner is entitled under Social Services Law §368-a(1)(h)(I). The Petitioner believes that by withholding 27 . Nancy Rose Stormer, PC 315-735-9392 p.29 .~ payment, the Respondents have been unjustly enriched. Petitioner asserts that permitting Respondents to retain the Petftioner's reimbursements plai'nly would be against equity and good conscience because that would penmrt the State to abrogate its undisputed debts to Petitioner unilaterally, without any legal justification whatsoever. The Petitioner believes that Respondents received moneys belonging to Petitioner, that Respondents benefitted from the receipt of such moneys and that Respondents should not in good conscience be permitted to retain such moneys. Matter of Witbeck, 245 Ad 2d 848, 850 (1997). Petitioner considers that > Respondents have been unjustly enriched at the expense of Petitioner and Is required to make restitution to the Petitioner. Blue Cross of Central New York v. Wheeler, 93 AD2d 995, 996 (1983). The Respondents perceive no unjust enrichment. Again, Respondents assert that the Petitioner has ignored the existence of Section 61, and recite the benefits which Respondents perceive to have flowed to Petitioner as a result of the cap. The Respondents do not understand how they are enriched by following the language of Section 61 and why Section 61 is against equity and good conscience. The Court again finds this an innovative approach by the County, but does not believe it can be assessed against the State of New York or a State agency. A seventh cause of action seeks to impose a constructive trust over 28 "' Nancy Rose Stormer, PC 315-735-9392 p.30 .- the funds that Respondents were obligated to pay Petitioner for Medical Assistance payments made on behalf of DOH prior to January 1, 2006. Petitioner belies that Petitioner and Respondents were in a confidential or fiduciary relationship in administering the Medical Assistance program to ensure that certain mentally disabled medical assistance recipients did receive the medical care that they needed. The Petitioner asserts that Respondents have failed to ensure that proper overburden expenses were identified and paid, have concealed material information . from local districts, have knowingly denied State liabifities, and have failed to completely discharge their duties to the Petitioner. The purpose of a constructive trust is prevention of unjust enrichment by even an innocent party. Simonds v Simonds, 45 NY 2d 233, 242 (1978). Generally, a construc1ive trust may be imposed when property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest; Sharp v_ Kosm,alski, 40 NY2d 199, 121 (1976). The Respondents deny any improper motivatioh and/or a lack of fair dealing in their relationship with Petitioner. Respondents allege that Petitioner has not established the requisite element of a breach of any promise as Petitioner continues to cite the Jaw prior to the enactment of Section 61 as well as failing to cite a single judicial precedent for imposition of a constructive trust against any agency of the State of New York. The Court again finds this an innovative request but does 29 ,. Nancy Rose Stormer, PC 315-735-9392 p.31 not believe that it is appropriate as to the State of New York or a State agency. The Respondents seriously question the applicability of Article 78 to the history and set of facts herein. The question before the Court in this regard is whether the determination by the Department was affected by an error of faw, or was arbitrary and capricious or an abuse of discretron, or was irrational. Matter of Simmoy v. Boa.rd of Town Trustees of Town of Southofd, 61 AD 3d 763, 764 (2009). Respondents question how the denial or rejection could be an error of law when Section 61 is so clear and unambiguous; was arbitrary or capricious or an abuse of discretion when if conforms to the letter of an existing State law; was irrational when implementing a clear statutory mandate? DOH applied Section 61 as written. Respondents assert that there is a distinction between DOH misapplying, or improperly interpreting Section 61 and DOH's use of Section 61 to deny reimbursement DOH believes that it took no action other than that expressly mandat13d upon it by the legislative enactment of Section 61. The Court respectfully disagrees with the Respondents. The legislation· was drafted, squirreled away in a massive budget bill and enacted for the purpose of walling off existing debt and avoiding legitimate fiscal responsibility to the counties of the State of New York, which was not proper. 30 Nancy Rose Stormer, PC 315-735-9392 p.32 This constitutes the Decision of the Court. Petitioner's counsel shall submit a proposed Order on notice to Respondents' counsel. Dated: January 15, 2014 at Watertown, New York ENTER Matter of County of Oneida v Shah Index No. 2013-1788 3157906436 SUPREME GOURT PAGE 83 At a term of Supreme Court of tbe State ofNe'" Ym·k held hiand for the County of O:nelda at the Oneida County Courthouse, 200 Elizabeth Street, Utica, New York on the 2S'' day ofFebruary 2014, PRESENT: HONORABLE llERN.AlJETTE T, CLARK JuiriUc• ll"rosxdlng STA TE OF NEW 'l;'QJRK SUPREME cou1n COUNTY OF ONEIDA In the Matter l>f COUNTY (JF ONEUJA, J? etJti<>ner-Plaintiff, For n Jndgment l''ur"Suant to Article 78 of the Civil Practice Law and JRn'1-os ffnd a Declaratory ,Judgment Pu>'$Ua11t to Smplaint. On or about October 30, 2013 Respondents' filed an Amended Verified Answer. tc the Petition and Complaint along with a Motion fo1: Summary Judgment on the DeclaratotY Juc:°.g1T1ent claims. 3157986430 SUPREME COURT C011sidere:m.burse Petitioner f01' the ove.tb\ltden expe1)ses that Petitioner incurred on behalf of DOH, ln ::el fame on that duty. Respondents' can n.ot n.ow rely on a l:>aldly retroactive stat\lte to avoid thi:oir cl,etll' duties and. impair Petitlone1"s vested J:lght to reimbursement." (Petitioner's Amended Verified Petition and Complaint p. 10), Petitioner's claim t11at · Respondents' r~fwia.l to reimtn1ro$e Petitioner the $3~12'3,S71;'LS6 it is owed bru:ied exclusi-vely'on 3 02/28/2014 15!39 3)57986436 SUPREME COIJRT PAGE 06 tl1• retroactive applic,1tion of Section 6{ is irrational, arbitrary and oapriclous. Tb.e thrust <•f Respondents argument was s'Jooinctly stated in their Memorandum of Law; "ln ;1implest terms respond.ents contend that forther relmburs~ment of owl'bmdon claims post Cap gives the cowities a double dip into the Medki.>id coffers. Responde11ts have consistently maini:al11ed this positlo11 thtm1gl1 the first and second waves of unsuccessfol litigation -at all stops the,i:: beliefthatthe Cap statute if properly interpreted, walls off reimb1trsement of post Cap overburden claims. The 2010 Amendment 11tt<1mpted to make the necessary adjustment to the Cap statute, but by vfltne ·Df appellate review failed to achieve the clarity necessaiy to (ICc1;1mpHsb what Section 61 has now finished. With thls as a backdrop, it sho11ld come as no surprise that the legislatute enacted Section 61 in an atte1npt to once and for all clarify or remediate the Cap stafute w that it wi~mhiguously captures the intended state of the law, e.g, that post 0lp . reirtttb11ts•m.er.1t for pre-Cap overburden claims :ire prohl.bitecL J;lecause Seo.\fon 61 is a clarifying amendment to a prior Jaw it may be applied retmaorively, d.espite petitioners protestati.ons to the contrary." · (R~npo11.dents' Memorandum of Law p. 28) After carcf\ll!y l'eviewing the entire record in this actior' considering the at'~UJrtents. of counsel as well as ihe facts and legal analysis set forth in the reoent decisions ln Supreme Court. Jefferson County ( l)ilbe1t, J., fudeit No. 2013-1956, Novembet• 14, 2013); Supreme Court Niagara County (K',1£,cnt·Panepinto, .J. fodex No. 149492-2013, June 18, 2013), and Supreme Cou1t St. LawrellC' (:mmty (Demme.st, J., fodex No. 140712, July 31, 2013), this Co\lrt, although it attempted, simpl :r c1m not add to what has already been written aod decided by courts across this state. Thi. Court :fads .lu.~tjce Demarest analysis regarding whetb.et· Section 61 ls merely a «clarifying" amend:'.llen4 particularly persuasive: "This ,'.>fgument ls easily disperu;ed with by referoni::e to the Third Depattment'a rO;ling in Matter ofCouf!ly of St. Lcrwrenc• v, Shah, 95 A.D.3d 1543 (3"' Dept. 21114): 4 62/28/2014 16:39 3157986436 SUPREME COURT "1'his Court has previously held that prior to 2006, upo.n payment to DOH for servloos provided to overburden patients for whinh wi local share was ow!.ng,, petitioners right to reimbursement for ~.11oh expenditures accrued." Matter o/St: Lawl'ence Countyv. Dai11~.1', 81 A.D,3d at 216). Thus, tl1e 2010 ametidment, even !ftt was M•nded by the Legis/C11t11'e ro t•epea/ Social Service~ Law Seot1o'1 $68-a(l)(h), cannot serv~ to l'elieve the state of'lts obli;;a:tion to refund the counties for these expenditures made r,rior to ,knuazy 1, 2006 (Matier a/County of Niagara v. Daine!', 91 A.r:t.3•:L ~t 1290)," at page 1554 (emphasis added). Seo1iot\ 61 is clearly "intended" to repeal Social Servioes Law Section 368-a (!)(!(· l>> order to relieve the Slate ofits obligation to pay reimbul'Sement and so it o•Ttllt>i stand. lnsofar as Section t)l attempts to deny the County repayment of obligations already accrned, !t i$ unconstitutional." PAGE 07 Accord!J;i.gl'~', »fter consideration of. all of the pleadings and oral argument of counsel, it is therefore Ordered thatR~:spondents' Augu:;t 20, 2013 and October lO, 2013 denial of Petitioner's reimbursement olai.:ns iB horeby annulled as arbitrary, cap.dciattS and/or affected by an error of Jaw; and ltis furtb~tr Ordered, tl:-.at Respondents are directed to calcnlate, vlOtlfy and pay any 'remah1!ng overburd.en e~pensns and reimbursemel)t due qnder Social· Sernces Law Section 368·a 'hithin thirty days of serv.ke MNotice of Entry of this Order and Judgment; and it ls futtl1er O!'dored, tl:.al Responden1s are directed to allow Petitioner's claims for reimbursement and are directed ta pay Petitioner's r,onding claims for relmbursement in the mno\lnt of $3, 123,S 78 .5 6 witilin thMy days of service of Notice of Entry of this Order and Judgement; ru\d it is farther Ord•r•rued upon Respoi:dents' rel!mwe on. their belief that Seotlon 61 was a clarifying amendment and therefore constituti'Jnal to c;leny Petitioner's claims; end it is further Ordered, 1:hat file remaining relief requested in the pt;tition is hereby denied, This shall r::>nstlmte the Decision and Order of this C Dated: Pebrumy 2ll, 2014 ·Justice Matter of Collnty of St. Lawrence v Shah Index No. 140712 o.w«1 06mllfe~\, ,J.S C. :iuPlf>fllll Cou1l 4(i C11111t.$l1Jt, NY 1:'1517 i I Couniy of St. Lawrence v. Shah, et al. I 3 Page "[n]otwlthstanding the provisions of section 368-a of the social services law or any other contrary provisions of law, l10 reimbursement shall be made for social services districts' claims submitted on and after the effective date of this paragraph, for district expenditures lnourreq p,rlor to January 1, 2006." On October 3, 2012, the County, using available source maierials, identified "overburden" expenditures of $495, 116 and submitted a claim for reimbursement of that amount, pursuant to Social Services Law §368,a. That claim lw<1s rejected based upon Section 61, and this proceeding ensued. The Coc1nty seeks the following relief: 1. Annulling the determination of the Respondents to deny reimbL1rsement of the overburden expenses incurred prior to January 1, 2006, as being . ' arbitrary and capricious and/or affected by an error of law; 2. Compelling the Respondents to approve and pay the claim; 3, Declaring Section 61 unconstltullonal as it denies the County of vested riroperty rights without due prooess of law; 4. Declaring Section 61 unconstitutional as it violates Statute of Local Govern men ls §11 (4) or, alternatively, Article IX, §2(b)(1) of the New York Stale Constitution and Statute of Local Governments §2; 5. Award damages of at least $495, 116; 6. Impose a constructive trust over the 'funds that Respondents were obligated to reimburse the County pursuant to Social Se1vioes Law §368-a; 7. Award the costs, disbursements and attorney's fees incurred. Pini() Onimi1e~1. J.6.C S.ui:iium{l COl!rl •10. coun su~..i -;.:uo\ll!n !>I'( 1:)11\i' d " ii I County of St. Lawrence v. Shah, et al. I Page 4 I ,.-----+ .........,_,. 11 I I il ll II \1 II Ii ii . l! ~ ; !l .i ,, Respondents move for summary judgment on the declaratory judgment and State law claims. Petitioner cross-moves for similar relief. In support of the motion, Respondents submit the affidavit of the Deputy Director for Administration with the New Yori< State Department of Health. He candidly admits thil\~IUSI, J S.C Supumw <.:oull ·II.I C11ur! St1a11! CMll,h/'l' l!)a17 ii " ii ll County of St Lawrence v. Shah, et al. Page 2 ii·="'======~==~========~======================~~==~====== q \\ , , Petitloner's request for an order annulling ll1e Respondent's decision, i \ received by Petitioners on March 21, 2013, denying its reimbursement claim as being . I arbitrary, capricious and/or affected by an error of law is, in all r~spects, granted. Peti~oner's request for an order in the nature of mandamus directing the Respondents to review, verify and pay any legitimate claimed overburden expenses is I granted. Respondents are directed to pay lhe pending claim of $281,412.61 or provide proof that any or all of the claim is not legitimate within 30 days of service with notice of entry of this Decision and Order. Petitioner's other requested relief is deemed moot. Petitioner's request I for attorney's fees is denied in light of the Respondents' reliance upon Section 61. J which, on its face, supported the position !~ken to deny the claims. . SO ORDERED . DATED: ENTER: {Decision & Order, and moving papers filed} " i; 1 · I i '\ 11 p 11 'I 11 { l l! " " APPENDIX Submissions Considered 1. Notice of Petition, dated Aprn 1, 2013. 2. Affidavit, with attachments, of Christopher E. BuclECJll.EE]() that, for th<> reasons set forth in Petitioner's papel'S, and in tills Court's previous decisions irl Malk,t.of Co1mty of St. Lawrence v Sh1ill, Sup Ct., St. Lawrence County, July 31, 2013, Demarest, J., Index No. CV-2013-140712 (u.ttacbed hereto M ltl!ll!ibit A), and Matter of CmmJY_Qf..§j;,_La)Yrence v Shah, S11p Ct, St. Law1·ence County, July 31, 2013, Demarest, J., lndex No, CV-2013-140998 (attached hereto as ~ox Mb it B) ( col.J.ectivcly the "Recent Decisions"), the defenses asserted by Respondents based upon Section 61 hereby are rejected; and it is f\:nther ORilll!:IRIF.J), Al)Jf1UJOGED AND DlliCHEJW that, for the reasons set forth i11 Ptotiti.011er's papern, and in the Recent Decisions, Petitioner's reqt1est for an order rumulling tho Respondents' deoisio:n dated April 10, 2013 denying its roimbuwement claim as being arbitraiy, capricious and/or affected by ru1 error oflaw is, in all respecl,, granted; and it ls fut1her ORlPEllED, AJ[),JlUDGEll:l AND DECREED th.at, for the reasons set forth \11 PeLitioner 1s papet'S, tJ1e H.ecent Decisions, and in the 'Third Departrnent)s de-cisions in :M!ltt~L.Q.f Co1mty of St, Lm>l!'oQQe v Shah 95 A.D.3d 1548 (3d Dept 2012) and Matter of County of St. 3 Lawrence v_Dai.nes, 81 AD3d 212 (3d Dept 201. l.), this Comt finds that Petl!ioner's right to reimbrn'Bement u11det Social Services Law § 368-a accrued prior to 2006, upo11 Petitioner's payment to DOH for services provided to ovcrb\lrdened patients for which no local share was owing; and it is fu1ther ORDERED, ADJUDGED AN)) DECREED that, for the reasons set forth io Petitioner's papers, the Recent Decisions, 1md ln tl1e Third Department's declsions In. Matter of Q,iJ,Llli)'_ofSt,.l,~wrenl).SLY. Shah, 95 A.D,3d 1.548 (3d Depl 2012) and Matter of County of St. Lawrence v Q@JM, 81 AD3d 212 (3d Dept 2011), this Court finds that Petitioner's tight to reimbursement nnde1· Social Services Law§ 368-a is a 'Vested 11.ght that eam1ot be extiuguished by retroactive legislation; an.d it is thither a ..• N