In the Matter of County of Chautauqua, Appellant,v.Nirav R. Shah,, et al., Respondents.BriefN.Y.September 7, 2016-··, . . .. ·To pe argued by: · Christopher E. Buckey, Esq. · 10 minutes requested N eW York $~Jri~~ftie COurt ... /• • : • ' \ • > \ (: ~ ' - - ··,~ • - • );·-.. ~:__.- ~·' I -~•:.1i .. :·.:. :.;. APPELEA'fE·nrv1s10N:~,;f'&nrR.tI:f·n£PARTMENT ; .· ; "·-·. :, .... ··\.<''.. •. >" .. ··. ·Dodcetl\1b .. cl\:i,1£f.b.Q92~~'.· · '. '; ; . -· ~ : . ;""." ., _·. , .. · .. m me MA.tre; 6~ :furM?~tlcA:noN.oF :.- ... . :~-;. -l .. · ~- '..'.:; ·:·.c::: . ~- ... --'· .-., ·.:·."i·. ·._''-'. · ··.· . · ' . - •I : ·::: •. · · . . . . . ; ,606N'tY.,b'.F.c!fAOtXu.QuA; ~· . ,. ·;;_::, »"\. ;f£fi~~~l~~t.• ... p.".·1 "~i-. ··. .J. {;'."" ... ... ,· . --.~:'~(-,.,Jt~.';:.-.~ :'. .. :.: ·:· •, '.,;·/·;' >-;,: '. .-,: ·. ''.",> • ".·:~· · .• , .".:·~:. . . -_: .. ;~,- ,,,. ,. _).·.;· .... 1": ·'· .·' _·,.. ·--- .•. . ·'".~-~. ·:·:·. ·.: ·->>- ·~ ;'~"; :· ; .. b /: .... . .. . . . .. ·' . : ~ ·~. : Jon E. Cram, Esq., Of Col.l.nsel. .,, ;;. ,;,;..1inguishing 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 20-31 ). 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 512-514, 843-844). Respondents admit that, during that same six year period, despite being made aware of the improper coding on their computer system, they did nothing to ascertain the amount owed to Petitioner and the other counties, let alone fully satisfy their statutory duty to reimburse Petitioner and the counties (R 448-449). 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 inelevant to the reimbursements Respondents owe to Petitioner under Social Services Law § 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 II [B][3], infra). Respondents' pre-2006 obligations to Petitioner 24 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 499-503, 507-508). 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 proDlem. Respondents' contention that Petitioner purportedly receives certain protections under the Cap Statute that render Section 61 "fair" is entirely inelevant. For example, Respondents assert that the Cap "shields" Petitioner from contributing to judgments rendered in favor of providers (Resps' Br., at 23). 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 25 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 24). 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 27), wholly ignores Respondents' (1) own contention that these reimbursements are purportedly "unknown and unknowable" (R 433); (2) repeated complaints regarding the burdens of calculating these amounts (R 449); (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. Third, 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 overbllidetLreimbursement, Section 61 was required, at the very least, to provide a reasonable grace or iirnitations period (e.g., one year) 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)]). Section 61 did no such thing. Instead, it barred Petitioner's claims for reimbursement immediately when it became effective. Respondents' unsupported claim that due process has been satisfied because Petitioner 26 purportedly has been able to submit the allegedly "stale" claims for reimbursement since the 1990s (Resps' Br., at 20-21 ), 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 I, Petitioner had no obligation to submit claims for reimbursement, and has only been compelled to do so due to the State's failures (see County of St. Lawrence v Daines, 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 479-480, 499-500, 894-895). 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 County of St. Lawrence v Daines, 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 Afiidavit") (R 1014-1032). When the Meister Affidavit (R 1021-1023) is compared to the Affidavit of Robert LoCicero sworn to September 26, 2013 and submitted in the instant proceeding (the 'l0Cicero Affidavit") (R 439- 441 )i 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 argument previously asserted in St. Lawrence I. 27 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, 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 Court and the Third Department (see County of St. Lawrence v Shah, 95 AD3d at 1553; County of Niagara v Daines, 91 AD3d at 1289; County of St. Lawrence v Daines, 81 AD3d at 216; County of Herkimer v Daines, 60 AD3d at 1457). Thus, Respondents; contention that Petitioner had "ample forewarning that its claims might be extinguished" (Resps' Br., at 25) 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 determines 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 Rirem 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 o\:vn 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 28 obligation to submit claims, or to take "any action to receive reimbursement for overburden expenses" from DOH (see County of St. Lawrence v Daines, 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 449). Respondents admit, instead, that it was their responsibility to "identify] those Medicaid recipients who were mentally disabled under the applicable overburden criteria" (R 437, 449, 465). Respondents have failed to satisfy this responsibility for decades and, in fact, still have no intention of doing so, to the further expense of Petitioner and the counties (see R 449-451 ). 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 490, 504). Simply stated, Petitioner's actions or inactions since 2006 are irrelevant. 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 29 Respondents as far back as 1984 (R 447, 450). 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 l, 2006-retroactively extinguishes Petitioner's vested right to reimbursement for overburden payments taken by Respondents prior to January 1, 2006 (Resps' Br., at 27-29). 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 Deprutment, 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 I, 2006 and, therefore, applies only to expenditures incurred from January 1, 2006 forward (see Dorfinan 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, § 1 [ 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 30 retroactively deprive Petitioner of its vested right to reimbursement (see County of St. Lawrence v Daines, 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 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," determining 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" (Bol(ja 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 ofN.Y., 77 AD3d 1080, 1083 n 2 [3d Dept 2010], lv 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 Legislatures original intent. Thus, the Legislature's belated pronouncement of its 31 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 construction when such a construction 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 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 County of St. Lawrence v Daines, 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 Requires 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 32 Resps' Br., at 30-31 ). There is no authority in support of this purported interest because it is not the type of overriding 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, pen11itting Respondents to avoid their clear statutory obligation to reimburse Petitioner would 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 sbould declare Section 61 unconstitutional and affirm Supreme Court's Order and Judgment. POINT III SUPREME COURT ERRONEOUSLY DECLINED TO COMPEL RESPONDENTS TO REIMBURSE PETITIONER PURSUANT TO SOCIAL SERVICES LAW § 368-A Notwithstanding that Supreme Court, Chautauqua County properly declared Section 61 unconstitutional, and compelled Respondents to pay Petitioner the $217,967.75 in overburden reimbursement claims that Petitioner submitted to DOH, the Court declined to compel 33 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 en-or. Moreover, even if Supreme Court did not find that Section 61 was unconstitutional, this relief would still be warranted as a matter of statutory construction, pursuant to General Construction Law § 93 and pursuant to the special facts exception doctrine. Therefore, this Court should modify the Supreme Court judgment by compelling Respondents to calculate and pay Petitioner the total remaining overburden reimbursement owed in accordance with Social Services Law § 368-a. A. After Supreme Court Declared Section 61 Unconstitutional, No Basis Existed to Deny Petitioner Mandamus Relief Compelling Respondents to Satisfy their Mandatory and Ministerial Overburden Reimbursement Duty. 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 reimbursement 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 can.TJOt be disputed that Respondents have unreasonably withheld these reimbursements from Petitioner in derogation of Petitioner's statutory rights. Respondents argued below that they were ban-ed from performing t.lieir mandatory reimbursement duty under Social Services Law § 368-a because Section 61 provided a clear mandate to DOH forbidding the payment of overburden reimbursement.. Upon Supreme Court's invalidation of Section 61, however, Section 61 's supposed barrier to Respondents' mandatory reimbursement duty was extinguished. 34 Recognizing that this result was possible, 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 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 mam1er ... 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 manner 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 cannot be directed to decide 35 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 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 community-based 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 (IRA); 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 36 (R 953). continuing day treatment programs (including Subchapter A day treatment). 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 necessary under Social Services Law§ 368-a and Respondents have absolutely no discretion to avoid it (see e.g. Matter o.f 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"]). Petitioner does not seek reimbursement for any individual that does not satisfy DOH's set overburden criteria or to compel Respondents to undertake 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. Because Supreme Court by declaring Section 61 unconstitutional removed any possible barrier to granting Petitioner that mandamus relief, and Respondents' statutory reimbursement duty does not involve the exercise of any discretion, Supreme Court erroneously declined to compel Respondents to calculate and pay 37 Petitioner the total remaining overburden reimbursements owed in accordance with Social Services Law§ 368-a. B. The Plain Language of Section 61 Does Not Extinguish Respondents' Underlying Reimbursement Obligation. Even in the absence of Supreme Court's proper invalidation of Section 61, it is clear that Section 61 does not extinguish Respondents' obligation, under Social Services Law § 368- a(l)(h), to reimburse Petitioner for the overburden local share payments taken prior to January 1, 2006. That obligation is still in place. Section 61 merely states that Respondents are no longer required to reimburse Petitioner for "claims submitted on and after the effective date of [Section 61), for district expenditures incurred prior to January 1, 2006" (L 2012, ch 56, part D, § 61 (emphasis added)). Had the Legislature intended to eliminate Respondents' reimbursement obligation, it could have repealed Social Services Law § 368-a(l )(h), or used language that expressly eliminated this obligation. It chose not to do so, however, and instead chose language that merely cut off Petitioner's right to receive payment for submitted claims. "The 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 [I ri Dept 2014 ], appeal dismissed 23 NY3d 982 [2014], quoting A1atter of Tiffany, 179 NY 455, 457 (19D4]). "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). The language of Section 61 can and should be construed as merely terminating the reimbursement claims process, which Respondents temporarily suspended in April 2005 (R 490), but otherwise leaving Respondents' reimbursement obligation intact. The Memorandum in 38 Support of Section 61 supports this interpretation, explaining that "Section 61 of the bill would . . . clarify that local governments cannot claim for overburden expenses incurred prior to January 1, 2006" (R 473 [emphasis added]). Nothing in the Memorandum suggests that, by adopting Section 61, the Legislature intended to repeal Social Services Law § 368-a(l )(h), or to terminate Respondents' reimbursement obligation. Respondents failed to submit any evidence to the contrary, and have in fact conceded that Section 61 was intended only "to 'wall-off' any further potential liability for overburden reimbursement claims that were submitted on or after the provision's effective date of April 1, 2012" (R 447 [emphasis added]). That the legislative history states that Section 61 was purportedly intended to address "adverse court decisions" is irrelevant, since the Legislature lacks the authority to adopt a clarifying amendment to "declare a different legislative intent contrary to the plain meaning of the earlier law" (Boltja, 186 AD2d at 775; see also Roosevelt Raceway, 9 NY2d at 304; Island Waste Servs., Ltd., 77 AD3d at 1083 n 2). As the Third Department has expressly confirmed, Petitioner has absolutely no obligation to submit claims for overburden reimbursement (see County of St. Lawrence v Daines, 81 AD3d at 218 & n 2; see also R 893 [stating that DOH voluntarily credited Westchester County in 2003 for known, unpaid overburden reimbursement going back to at least 1998]). In fact, Petitioner "need not take any action to receive reimbursement for overburden expenses" (County of St. Lawrence v Daines, 81 AD3d at 218 & n 2 (emphasis added]). Accordingly, elimination of the claims submission process does not in any way alter Respondents' underlying duty to reimburse Petitioner. Any other construction of Section 61 forces the reader to conclude that Section 61 not only implicitly repeals Social Services Law § 368-a(l )(h), but also unconstitutionally impairs Petitioner's vested rights. Thus, Petitioner's interpretation of Section 61 also is consistent with the construction expressly intended by the Legislature-that it "shall not be construed to alter, 39 change, affect, impair or defeat any rights, obligations, duties or interests accrued, incurred or conferred prior to the effective date of this actn (L 2012, ch 56, part D, § 65[k]). Significantly, in County of Niagara v Daines, 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 (91 AD3d at 1289). Respondents' construction of Section 61 here flatly ignores that portion of this Court's decision and, thus, similarly fails (see Matter of Monroe County Pub. School Dists. v Zyra, 51 AD3d 125, 131 [4th Dept 2008] e'the rules of statutory construction require that we avoid rendering statutory language superfluous"], lv denied 52 AD3d 1293 [4th Dept 2008]). Therefore, even if Section 61 is upheld as constitutional (which it should not be), this Court should compel Respondents to fulfill their clear reimbursement obligation under Social Services Law § 368-a, by calculating the total reimbursement liability owed to Petitioner and reimbursing Petitioner for the full amounts owed, including the amounts identified in these proceedings. C. Section 61 Retroactively Deprives Petitioner of its Vested Property Right tO Reimbursement in Violation of General Coo.st-~ 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 County of St. Lawrence v Shah, 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 40 thereof shall not affect or impair any ... right accruing, accrued or acquired ... prior to the time such repeal takes effect"]; County of St. Lawrence v Shah, 95 AD3d at 1553-1554; County of St. Lawrence v Daines, 81 AD3d at 216; County of Herkimer v Daines, 60 AD3d at 1457). Thus, because Petitioner's right to reimbursement vested long before Section 61 was enacted to purportedly extinguish that right, General Construction Law § 93 preserves Petitioner's entitlement to reimbursement in its entirety. 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. Indeed, it cannot be disputed that Respondents' interpretation of Section 61, if adopted, would have wide-ranging repercussions on Petitioner's vested rights to reimbursement. In fact, under Respondents' impermissibly expansive view, Petitioner would be deprived of reimbursement for all pre-2006 overburden payments taken 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 447-448). This Court can avoid that impermissible result, and satisfy the directive of General Construction Law § 93, however, by adopting Petitioner's reasonable interpretation of the plain language of Section 61-that Section 61 bars only the payment of reimbursement clailr.s, and not Respondents' underlying reimbursement obligation. In so doing, Petitioner's vested rights to the overburden reimbursements are preserved and the purpose of General Construction Law § 93 is satisfied. As the Third Department held in St. Lawrence II, this Court should construe Section 61 pursuant to General Construction Law § 93 to prevent the State from unilaterally legislating away its undisputed reimbursement debt to Petitioner (see County of St. Lawrence v Shah, 95 AD3d at 1553-1554). 41 D. Alternatively, the Special Facts Exception Bars Respondents from Relying on Section 61 to Deny Petitioner's Overburden Reimbursement Claims. Although a court generally must decide a case based on "the law as it exists at the time of the decision" (Matter of Pokoik v Silsdorf, 40 NY2d 769, 772 [1976]\ a "court may deny an agency the benefit of a change in the law when it has intentionally or even negligently delayed action ... until after the law ha[s] been amended" (Lawton, 128 AD2d at 206, quoting Matter of Faymor Dev. Co. v Board of Stds. & Appeals of City of NY, 45 NY2d 560, 565 [ 1978]). Importantly, "[e]ven in the absence of bad faUh, administrative procrastination of [a large] magnitude, be it negligent or willful, without excuse or justification, affords a basis for applying the pre-existing [provision)" (Matter of Amsterdam-Manhattan Assoc. v Joy, 42 NY2d 941, 942 [1977] [emphasis added)). This doctrine, kn0\¥11 as the "special facts" exception, "is based upon equity, not constitutional principles[,]" and is plainly applicable in this case based on Respondents' decades-long delay and dilatory tactics to avoid their reimbursement obligations (Lawton, 128 AD2d at 206). The evidence that Respondents employed dilatory tactics leading up to the enactment of Section 61 is undisputed. Specifically, Respondents: (I) failed to properly code overburden recipients (R 496-502, 844); (2) failed to notify Petitioner which overburden recipients were not properly coded (R 499-500); (3) refused to recode overburden-eligible individuals after numerous courts pointed out Respondents' failures to pay reimbursements for those individuals (R 497-498); (4) refused to calculate the total amount of overburden reimbursements owed to Petitioner (R 449-450); (5) refused to reimburse Petitioner for the overburden payments Respondents admit have been owed for decades (R 447-449); (6) directed OTDA to suspend processing or payment of overburden reimbursements claims (R 490-491 ); (7) sought to avoid and ultimately denied those reimbursement claims that Petitioner could identify (R 339, 446- 42 447); (8) refused to disclose critical documentation necessary for Petitioner to finally identify and verify the unpaid overburden reimbursement (R 75-78, 135-150, 202-203, 503-504; see also Matter of County of St. Lawrence v New York State Dept. of Health, Sup Ct, St. Lawrence County, June 20, 2013, Demarest, J., Index No. CV-2012-0140252 [included in attached Addendum]); (9) advocated for statutory amendments that attempt to improperly eradicate their duties retroactively (R 446-447); and (10) refused to recalculate the 2005 base year Medicaid Caps for Petitioner and the other counties (R 506-509). Respondents do not dispute, and often concede, that they took many of these actions, which resulted in the State improperly retaining millions of dollars of county funds contrary to the express dictates of Social Services Law§ 368- a (R 445-449). Indeed, Respondents have yet to explain how they simply failed to reimburse the counties an estimated $180 million in improperly taken overburden payments (R 450, 508-511). Respondents' dilatory conduct extends well beyond the undisputed facts described above. From 2006 through April 2012, Respondents also forced the counties to litigate their rights to unpaid overburden reimbursement even though Respondents admitted the reimbursement was due and owing. As discussed above, the litigation resulted in nine appellate decisions, all of which directed Respondents to fulfill their statutory obligation. The litigation continued until after Section 61 was effective, which means that, from at least 2006 through April I, 2012, there was not a single instance where Respondents voluntarily reimbursed Petitioner and the counties for improperly taken overburden payments. Based upon the undisputed facts relating to Respondents' failure to properly reimburse Petitioner, their efforts to conceal this failure and the six years of extensive litigation leading up to the enactment of Section 61, Petitioner respectfully submits that Respondents' actions were, at a minimum, negligent. Accordingly, even if this Court determines that Section 61 is constitutional (which it should not), it should alternatively find that Respondents were precluded 43 from relying on Section 61 as a basis to avoid the State's longstanding and undisputed debt to Petitioner (Lawton, 128 AD2d at 206; see Amsterdam-Manhattan Assoc., 42 NY2d at 942; Matter of Cifone v Aiello, 179 AD2d 876, 877 [3d Dept 1992]; see also Matter of Mamaroneck Beach & Yacht Club, Inc. v Zoning Bd. of Appeals of Vil. of Mamaroneck, 53 AD3d 494, 497 [2d Dept 2008], lv denied 11 NY3d 712 [2008]; Matter of Miller v Southold Town, 190 AD2d 672, 673 [2d Dept 1993]). CONCLUSION For the foregoing reasons, Petitioner respectfully requests that this Court modify the Order and Judgment of Supreme Court, Chautauqua County by compelling Respondents to satisfy their statutory reimbursement duty under Social Services Law § 368-a and, as so modified, affirm the judgment in its entirety, and award Petitioner such other and further relief as this Court deems just and proper. Dated: September 9, 2014 Albany, New York WHITEMAN OSTERMAN & HANNA LLP By: C-~ Christopher E.~key, Esq. Robert S. Rosborough IV, Esq. Monica R. Skanes, Esq. Nicholas J. Faso, Esq. Jon E. Crain, Esq. One Commerce Plaza Albany, New York 12260 (518) 487-7600 NANCY ROSE STORMER, P.C. Nancy Rose Stormer, Esq. Michael Bagge, Esq. 13 25 Belle A venue Utica, New York 13501 (315) 797-0110 Attorneys.for Respondent/Appellant 44 APPENDIX Matter of County of Broome v Shah Index No. 2014-0090 PRESENT: HONORABLE JEFFREY A.TAIT JUSTICE PRESIDING STATE OF NEW YORK , SUPREME COURT : COUNTY OF BROOME In the Matter of COUNTY OF BROOME, 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 -agalnst- NltR.A 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-Df;'Jfendants. APPEARANCES: Christopher E. Buckey1 Esq. White, Osterman & Hanna, LLP Attorneys for Pf!.Citioner-Plalntiff On~ Commerce Plaza Albany, NY 12260 Nancy Rose Stormer, Esq. Nancy Rose Stormer, P.C. Attorneys for Petitioner-Plaintiff 1325 Belle Avenue Utica, NY 13501 I At a Tenn of the Supreme Court of the State ofNew York, held ill and for the Sixth Judicial District, at the Broome County Courthouse, in the City of Binghamton, New Y erk on the 11th day of March 2014. DECISION AND ORDER Index No. 2014~0090 RJl No. 2014-0071~M Q Harris Dague, Esq. Assistant Attorney General Attorneys for Respondent-Defendant The Capital Albany, :N!'" 12224-0>41 HON. JEFFREY A. TAIT, J.S.C. This matter is before the Court on the hybrid CPLR Article 78 proceeding and plenary action commenced by Petitioner-Plaintiff County of Broome (County) seeking to compel reimbursement for certain Medical Assist~ce costs from Respondents-Defendants Nirav R. Shah, M.D., M.P.H., as Commissioner of ~e New York State Department of Healthj and fue New York State Department of Health (together referred 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 claims. Arguments of the Parties The County asserts that between January 1, 1984 and December 31, 2005 it incurred expenses on the State~s behalf for the treatment ofcertainmentally disabled Medical Assistance recipients, lmown as ((overburden expenses."1 The County claims that the State has refused to reimburse it fol' those expenses, which total at least $1, 170,022. 83 and the State is obligated to pay pursuant to Social Services Law§ 368-a.2 The County asserts that it transforred County funds to the State to satisfy the cost of treating these individuals on a weekly basis, and the State was then responsible for identifyillg those who satisfied the overburden criteria and reimbursing the County for the costs of their treatment pursuant to Socia( Services Law § 368-a. 2 A detailed recitation of the history of and interplay between Social Servlces Law§ 368-a and the 2005 Medicaid cap legislation and the 20 l 0 amendi11ent thereto, as well as tbe related litigation regarding the impact on the payment/reimbursement of o¥erburden expenses, is contained in the papers submitted by both the County and the Stat~ and thus will not be repeated here. ,1 On this application, the C0tmty seeks jan Order: annulling the St.ate1 s December 20, 201 ~ determination denying its claims for reit~bursement for pre-2006 overburden expenses; compelI ing the State to approve and pay its claims in that regard; compelling the State to calculate and pay the tot~l remaining overburden reimbursements due; declaring Section 61 of Part D of Chapter 56 of the Laws of 2012 (Section 61) unconstitutional; awarding the County damages of no less than $1, t 70,022.83; imposing a constructive trust over such funds owed by the State; and awarding the County costs, disbursements1 and counsel fees. The State 1 s primary argument in opp~sition to the County1 s claims is that Section 61 bars reimbursement of the overbmden expenses sought by the County. Section 61 provides: Notwithstanding the provisio~1s of section368-a ofthe social services law or any other contrary prov'f,sion oflaw, no reimbursement shall be made for social services disrycts' claims submitted on and after the effective date of this paragrapl:i, for district [overburden) expenditures incurred prior to January 1, 2b06, .. The St.ate submits the affidavit of Robert LoCicero, the Deputy Director for Administration with the New York State Department of Health, who states that the purpose of Section 61 was to address prior litigation3 and "to 'wall-off' any further potential State liability for such overburden reimbm·sement claims that were s"Ubmitted on or after the provision's Prompted by the State's prior refusals to reimburse counties for pre-2006 overburden expenses, with the State first relying on the 2005 Medicaid cap legislation (effective January 1, 2006) and then on the 2010 amendment thereto as a basis to deny the claims. The State claimed both barred reimbursement for pre-2006 overburden expenses. This led to several rounds of litigation by multiple counties, with courts unifonnly rejecting the State1s interpretation of the Medicaid cap and later amendment and co~pelling reimbursement of pre-2006 overburden expenses pursuant to Social Services Law§ 368-a (see Matter of County of St. Lawrence v. Shah, 95 AD3 d J 548 [J d Dept2012] [2010 amendrnentto the Medicaid cap statute did not relieve State of its obligation to reimburse counties for overburden expenditures made prior to that statute 1 s effective date]; Matter of County of Niagara v. Daines, 91 AD3d 1288 [4th Dept 2012]}. 2 effective date of April 1, 2012" (see LoCicei·o affidavit at '\f 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 cluims. In reply, the County argues that Secti'on 61 is not merely a Hdarifying amendment" and I instead amounts to a substantive deprivatlon of its vested right to reimbursement of the l overburden expenses which is being retroactively applied. The County points out that several courts have recently found Section 61 unconstitutional (?ee Matter of County of St. Lawrence v. Shah, Sup Ct, St. Lawrence County, August 30, 2013, Demarest, J., Index No. Ol4t656; Matter of Chautauqua County v. Shah., Sup Ct, Chautauqua County) December 9, 2013, Chimes, J., Index No. 2013~1266; Matter of County of Jefferson v. Shah, Sup Ct, Jefferson County, January 15, 2014, Gilbert; J., Index No. 2013-1956; Matter of County of Oneida v. Shah, Sup Ct, Oneida County, Febrnary 28, 2014, Cl4rk, J., Index No. 2013-1788; see also Matter of Chemung County vs. Shah, Sup Ct, Chemung County, November 19, 2013, O'Shea, J., Index No.: 2013~1849 [annulling State's denial of County's overburden reimbursement claims and I granting Petition to allow such claims}; Matter o.fCounty of Niagara v. Shah, Sup Ct 1 Niagara County, June 18, 2013, Panepinto, J,,lndex~o. 149492-2013). The County also points out that Section 61 only prohibits payment of "claims submitted" and does not impact the State's statutory obligation to calculate the total reimbursement liability under Social Services Law§ 368-a and pay the County the amount owed. Analysis As noted above, multiple recent Supreme Court decisions involving the identical is::mes presented here have held that the State cannot rely on Section 61 to deny counties' claims for 3 reimbursement of overburden expenses and/or have found Section 61 unconstitutional. Those courts have reasoned that because tbe County's right to reimbursement and repayment of the overburden expenses has already accrued, Section 61 cru.mot retroactively relieve the State ofits obligation to pay those funds. The State asserts that many of thosd decisions are based at least in part on the Third Department's holding in Mattera/County Jst. Lawrence v. Shah (see id., 95AD3dat1548). ' I The State argues that holding was based largely on the Third Department's view that the State was attempting to repeal Social Services Law§ 368-a by implication.4 The State asserts that both the text and legislative history5 of Section 61 rectify any perceived deficiency in that regard. However, the Third Department went on to conclude that the 2010 amendment to the Medicaid cap statute could not relieve the State of its obligation to reimburse counties for overburden expenses even if it was intendedito repeal Social Services Law§ 368-a, reasoning: i 4 ' Since the state was n<;:vei entitled to these funds, the 2010 amendment, even if found to apply to overburden expenditures, cannot serve to transform these county funds into state property and relieve the state of the legal op1igation to return them (see id. at 1554 [citing its prior holding that tlhe county's right to reimbursement of pre-2006 overburden expens~s accrued upon payment to the State for services provided to overburdened patients for which no local share was owing]). Since neither the 2010 amendment to the Medicaid cap nor its legislative history refers to the State's obligation to reimburse counties for pre-2006 overburden expenditures and the amendment does not explicitly repeal Social Setvices Law § 368-a(l)(h). In that regard, its legislative history nqtes that Section 61 "is necessary to address adverse court decisions that have resulted in State costs paid to local districts for pre·[Medicaid]cap periods, which conflict with the original intent of the local cap statute." 4 In light of the foregoii1g, based on these cases, and particularly the reasoning set forth in lvkrtter of County of St. Lawrence v. Shah, supra; the State cannot rely on Section 61 to deny the County's cla1ms for reimbursement of pre"2006 overburden expenses. Conclusion The State's December 20, 2013 determination denying the County's claims for reimbursement of overburden expenses is annulled as arbitrary, capricious, and/or affected by eiTOr of law. The County's request for an Order compelling the State to approve and pay such claims is granted as follows: the State is direoted to pay the County's claims for reimbursement of overburden expenses totaling $1, 170,022.83,6 or provide proof that any or all of those claims are either inaccurate or not legitimate, and to calculate and pay any remainii1g overburden expense reimbursements due under Social Services Law§ 368pa within 30 days of serviceofthis Decision and Order with notice of entry. The County's requests for costs, disbursements, and counsel fees and imposition of a constructive trust are denied, The State's motion for summary judgment is denied. ! This Decision shall also oonstitute the Order of the Court pursuant to rule 202.8(g) of the Uniform Rules for the New York State Trial Courts and it is deemed entered as of the date The State acknowledges that the County submitted claims on or about September 27, October 3, and November 18, 2013 totaling $1)70,022.00 for reimbursement of pre-2006 overburden expenses and that it disallowedlthosc claims based on Section 61 (see LoCicero affidavit at §§ 53p54). There is no indlcati~n that the State had any objection to the amount sought; rather, the State's opposition to rdimbursentent seems to be based entirely on the application of Section 61. 5 below. To commence the statutory time period for appeals as of right (CPLR 5513[a1), a copy of this Decision and Order, together with notice of entry, must be served upon all parties. I Dated: June 12, 2014 Binghamton, New Y ode 6 Most or all of the documents upon which this Decision and Order is based were received by Chambers in a scanned electronic fo1mat from the Broome County Clerk's Office and the originals remain filed with the Broome Co\lllty Clerk. Therefore, except as noted below> no documents have been forwarded to the Broome County Clerk with this Decision and Order. Documents forwarded to the Broome County Clerk wifu this Decision and Order: None ! • 1 Matter of County of Cayuga v Shah Index No. 2014-00000261 ,., J: I . ~ SUPREME COURT OF THE STATE OF NEW YORK'. COUNTY OF CAY1JGA In the Matter of com.TTY OJB' CA YUGA, Petitioner-Plaintiff, For a Jiidgmeut»Putsuaut to ArticlG 78 of the. Civil Practi c.e Law a;n(). RuJes apd a Deqla,ra1:9ry Judgm;ent Pt11·sua,nt to Section 3001 oftP,e Civil Practice L.aw an.dRules -again$t- NXRA V R. 'SJ:llA(I, M,D;, M.P.lt, as Commissioner of theNe;w York ·State D11par.tment· of Health and THE NEW YORK.STATE DEP. AE.TlVlENT OF HEAL TH, Respondents-Defendants. ORD'lff~R AND JUDGMENT IndexNo,: 2014"00000261 Hou. Thomas: G~ Le6ne WHEREAS, .Petitioner County of Ca)'uga ('~I>etlifoner") cotrunenced the etit('oner1s p1:1-yn'i©nt to DOB for i?etvioes- proviqed to averburdened patieQ.ts for wbkh no local share-was owing; and it is furthet ORDERED, ADJUDGED AND. DECREED· that, for the re~ons set fo1th in the Ti'a.bsc1•lpt, this Coui't finds that fetitione.t's right t0 reimbursement tmder Social Services Law § 3·68.,.a is a vf?.stedidghtthat cannot be extinguished.by .ret1'0.a:ctive legislai1on; and it i_s furthel' ORDERED1 A)l)JUDG.ED Al~ Dm:;REED th:l:lt for thv reasons set forth in the Tra:m;c:ript, insofar as. Seotion 61 attempts to deny the Co1U1ty repayment of obllgations. afre:a.dy ai.;""-uffi, 1± is unc.on:stitu.don.al; and it Js. :fu~ther OR'DERED, AD.JUD(HW AND DECREED that the Verified.Petitlort.andComplalnt.ls granted in part and denied inpurt; and 1t. is foith~r ORDERED, fo.J)JUDG-JE-D AN)Dl .DECREED that ,the determination of Respondent&, dated February 10> 2014, purporting to deny PetltioJ'let'.s ·i;Iaims for .reimburnement o:f the overhw'den expenses. that PetitioJ1er incl1l'red on behalf of Respondents prior to .J amiary 1; 200.6, 3: pi.n'mrnnt-to $ocia1 Services Law§· 368-a, so1e1y on the basis of Section 6'1, is b.e~·eby anmi1led as twbitrory and capribioii& and/01' affected. by an e11·or oflaw;. and it is further ORDERE1l, ADJUDGED A.I'W DECREED that,. Jor ilie reasons set forth In the Ti:ansctlpt1 R~po.ni:\.e11ts are directed to t'o~1hwith allow Petitfoner'·s claims. for reimbul'Sement ru1d to .Pay $426;630.15 to Petiti011e1'. within 30 days of set'Vice wit11 Noti¢e of Entry of this Order· and Ju.dgmetit;: u11d it is further ORD.EMDi ADmDGED AND DECREED that t1ie remaining relief requested iJ1 the Verified Petition and Complaint is de.hied as.academic. Datedi AubUEn1. New York May Z,t-, 2014 SD ORDERED, .---,~~·~ ~~G,l~~·· ~,fr"~· ,Justice 6f the Supten'.ie Co.mt. EX IBIT 1 2 3 4 5 6 7 9 10 11 12 13 1.6 17 18 19 2:0 21 2·2 23 24 25 SU .. l?REME 'COUR'I' OF THE" STATE OF' NEW YORK ·coONTY OF CAs.'UGA MOTION TERN ----------------------~----------------------x com!TY 0F CA Y.UGA, Pet.i,ti·oner1 -ag.ainst- NIRAV R .. s}U:rn.r -MDr MP.fl, A.$ -CQMMI.SSIONgR OF THE NEW YORK STATE DEPA~'J1MENT QE' li.EALT.H AND THE NEW YOJ;{K STA'l'E· DElPAR'rtvJENT Qt!' HEALTH, Respondents. .: Index No~ :2014-02 61. : peois:lo;n -----~..-....,.---""'- ............ ~~ ......... -...-- ...... -----"-:o::.t"""-----"-"""'w.i------ ...... - ..... x B :e f o r. e Cayuga Gounty C.ourt;hoµse Aubu:i;n, New York May '.l3 1 2014 HON. THOMAS G, LEONE, jus.tice A p p e a r a n .c e &. : WHI'I'.ElMA}!, QST-El"R~liAN & HANNA, LLP Attorneys ;tor the J?.etitioner one C.omme-rce Pl.a.za Albany, New York H~·26.0. BY; CRRISTO.PHER E .. BO.CKEY 1 E.SQ. / of counsel NEW YbRK S.TATE OFFICE ,OF THE A,TTORNE;)'. GENERAJ, .Attorneys for Respondenta- @1'5 Eri~ Btiuleyard West:, ,Suite 102. Syracuse r bl.ew .York 13'204--2 4'65 BY' ~ONNIE G, LEVY, ESQ, Assist.an-t. Attorney General, of co1J.iu:iel Lis.a M". Gia,.pona R_l?R.1 RMRr CSR 1 2 1 TBE ('.OORT i 2\11 rigbt. 2 All right.. First of a:ll, I -want to thar;i.k bqtJ1. 3· attorneys :for their subrn.is$ipl').S- ana ~heir or.al arguments 4 and tne'ir professionalism and court·esy that they 1·ve shown 5 6 The Court is going to make the. following 7 findin<;fs, and h.op:efully it. Wp:µ' t pe j;p6 ~is'j oiti-ted, -l!'o:i; 8 ·the re9s..on·s 4hat 1 Jere set forth i-n the County's pape.r-s 9 St. Lawrence Co., D~marest1 J., Index No. 140712, July 31, 2013); Matter of County of St. Lawn~~ v. §h.g,h, (Sup, Ct., SL Lawrence Co., Demarest, J., Jn_dex No. 140998> July 31, 2013); Matt~ of County of St Lawrence v . .S.h®.. (Su17. Ct, St. Lawrence Co,, Demarest, J., Index No. 0141656, August 2013), and the Court sees no reason to depart . therefrom. Based upon these holdings, and the entire· record before T_he Court, including but not 23-HOU-2013 00:29 Fr·om:CUM CO CLERK 6072422448 To: 15184877777 i ~ limited to the reascns as set forth in petitioner's papers, as well as the holding in Matter of County of St. Lawrenci;;; v. Shah, supra, respondents oannot rely on Section 61 tq deny petitioner'.s claim for overburde». costs. It is therefore, ORDERED, that respondents' Au.gust 12, 2013 denial of petitioner's reimbursement claims is he.reby annulled as aibitrary, capricious and/or affected by an error of law; and it is fu.rl;h.er OJRDERE:D, that the petition fa hereby gmnted, to the extent that respondents .are hereby directed.to allow petitioner's claims for reimbursement of.$606,203,31, within thirty (30) da.ys of entry of this Decision and Order; and it is further ORDER.ED, that respondents shall calculate and pay any rnmahling ov-0rburden reimbursement due tinder Social S@oes Law § 368~a within thirty (30) days of entry of this Decision and Ordi;ir; and it i$ further ORDERED, that :respondentsi m¢tion for summary judg:m.ent is dernllild; :and it is furt~er O.RDEJR1!1:D, that peti.tioneris request for costs, disbursements and attorney fees is denied; and it is furt1:ier ORDERED, that the remaining relief requested in the petition is denitd as academic, This. shall constitute thv Decision and O:i:der of The Court. ENTER Dated: NovernberlJ.'2013. ' Original: Nancy Kreisler, Acting Chief Clerk Supreme & County courts / Matter of County of Genesee v Shah Index No. 63493 STATE OF NEW.YORK SUPREME COURT : COUNTY OF GENESEE In the Matter of COUNTY OF GENESEE, 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, v. NfRAV 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. CHRISTOPHER E. BUCKEY, ESQ. Attorney for Petitioner-Plaintiff DARREN LONGO, ESQ. Index No.: 63493 Assistant Attorney General for Respondents-Defendants DECISION AND JUDGMENT ROBERT C. NOONAN, J. The County of Genesee ("petitioner") has brought the captioned hybrid proceeding to compel respondents to reimburse the county for certain medical assistance expenditures made prior to the year 2006, and for related relief. 11 II I Respondents-defendants ("respondents") oppose, and request summary judgment on petitioner's plenaiy claims. The matter came before the April 25, 2014 Special Term of this Court. Procedurally, given the special proceeding brought by petitioner pursuant to CPLR Article 78, the Court must apply a summary judgment analysis to the pleadings, papers and admissions initially submitted to the Court (CPLR §409[b); Matter of Trustco Bank v. Strong, 261 AD2d 25, 27; Matter of Empire Mutual Insurance [Greaney], 156 AD2d 154, 156). Since, under those rules, the Court would search the record in any event (Gilheany v. Civil Service Employees Association, 59 AD2d 834), a formal notice for cross-motion for summary judgment will not be required either in the special proceeding or the plenary action. However, "(o)nly if no trfable issues of fact are raised may a court make a summary determination following the hearing" (Slisz v. Beyer, 92 AD3d 1238, 1241). Very basically, the state, county and federal governments have historically shared the expense of providing medical care to individL1als who were indigent, including those disabled as a result of mental illness. The government funded health program is administered by the State Department of Health with funds received from the federal, state and local governments. Counties make payments to the state for their local share of the medical assistance payments. Although the State pays the medical providers, the county has the initial responsibility for the cost of medical providers for such indigent individuals within their local communities. With the movement toward de-institutionalizing many such individuals from state institutions and into the community, thus shifting such costs from the state to 2 the counties, the state was prevailed upon to assume full responsibility for the medical expenses of those de-institutionalized individuals (L. 19741 cc. 620 & 621), and then to reimburse the counties for the full amount of medical assistance payments (overburden expenditures) made by the county to the state on behalf of those de-institutionalized indtviduals (Social Services Law §368-a[1][h]). "Social Services districts thus initially paid their full local shares of the State's Medicaid payments to providers. The State subsequently identified those Medicaid recipients who are mentally disabled under the applicable overburden criteria and, for those that qualify, issued quarterly reimbursement payments to districts" (4/11/14 LoCicero affidavit at 4118 [italics added]). The state retained the ultimate responsibility to identify1 code and track those de-institutionalized individuals for which the county was entitled to medical assistance reimbursement. As alleged by petitioner, it has since been discovered that for a number of years the state either miscoded or surreptitiously recoded individuals for whom the counties were otherwise entitled to reimbursement for medical assistance, thus depriving the counties of their full reimbursement (see also 4/23/14 Stormer aw.davit at 1f'lf25 - 60).1 Voluntary disclosure of the pertinent information has not been forthcoming (id at '114161 - 69). Effective January 1, 2006, the methodology for computing the local share of the medical assistance cost changed with a "Medicaid cap statute" (L. 2005 c. 581 Part C), ellminating the payment-then-reimbursement method utilized under Soclal i.! I : j Services Law §368-a(1)(h). However, the Appellate Division of the New York State Supreme Court declared that the new formula was not retroactive and did not impair 3 • i the counties' right to reimbursement for overburden expenditures accrued prior to January 1, 2006 (see Matter of County of St. Lawrence v. Daines, 81 AD3d 212; Matter of County of Herkimer v. Daines, 60 AD3d 1456). It was subsequently determined that additional legislation (L. 2010, c. 109, Part B, §24), which the state construed to prohibit reimbursement of overburden expenditures beyond the Medicaid cap formula, did not effectively repeal the state's statutory obligation to reimburse the counties for expenses incurred prior to 2006 (Matter of County St. Lawrence v. Shah, 95 AD3d ·J 548). Further legislation, tucked into the expansive 2012 state budget bill (L. 2012, c. 56, §61), i.e., "Section 61", then specifically barred subsequent claims for reimbursement of pre-2006 overburden expenditures. That budget bill was Introduced January 17, 2012, and was signed into law March 30, effective April 1, 2012 (Id at §65). Nevertheless, the petitioner County of Genesee filed such a claim with the Department of Health on December 6, 2013, and an amended claim on December 17, 2013, wbich was rejected on March 17, 2014, based on the 2012 legislation barring such pre-2006 claims, Petitioner now claims that Section 61 unconstitutionally deprives it of a vested right under§368-a(1)(h) to full reimbursement for the overburden local share payments taken from petitioner. To the contrary, respondents contend that "the Medicaid cap brought* * * needed fiscal relief to petitioner and all Social Services districts by providing stability, certainty and predictability to their Medicaid costs. By complying with 4 Section 61, respondents achieve a similar outcome, one that lends stability and predictability to the State's Medicaid budgeting process by walling off riability for district Medicaid expenditures that, if incurred, were Incurred long ago" (LoCicero at '116). Moreover, the DOH still computes what the overburden reimbursement would have been under §368-a. "If the district would have paid less under the prior methodology, the Department issues a refund. If the district would have paid more under the prior methodology, the Department holds lt harmless and it, not the district, is responsible for paying those costs that exceeded the district's cap amount" (LoCicero at '1138; Stormer at '1121). According to respondents, petitioner itself has realized fiscal savings of more that 5.3 million dollars since the Medicaid cap's inception (LoCicero at 1j43). Thus, while espousing the "Medicaid cap's unarguable benefits to Social Services districts" (Locicero at ttl45), respondents do not deny that the DOH "can no longer reimburse Social Services districts for overburden payments formerly authorized by Social Security Law §368-a(1 )(h)" (LoCicero at 1f39), including those incurred prior to the Medicaid cap. It was concededly the purpose of Section 61 to '"wall-off' any further potential State liability for such overburden reimbursement claims that were submitted on and after the provision's effective date" (Locicero at ~50). Respondents note that between introduction of the budget bill on January 17, 2012, and its effective date, many Social Services districts submitted additional claims for reimbursement which were ultimately paid in June of 2012 (LoCicero at i!52). The petitioner, County of Genesee, however did not. 5 Respondents also contend that petitioner had the ability and opportunity to check the accuracy of the coding prior to the effective date of Section 61 (Lo Cicero at il'il28-30) and could have submitted its claim for additional reimbursement in a contemporaneous manner (LoCicero at 'il62; 18 NYCRR §635.1). Respondents argue that fo permit such reimbursement now would "shackle the Department and State with and unknown and unknowable financial burden for years, even decades, into the future" (LoCicero at 'ff61). Respondents' arguments, as a matter of public policy going forward, are cogent. Nonetheless, it has been universally determined throughout the State, albeit only at nisf prius, that Section 61 constitutes an unconstitutional abridgment of an accrued right to the reimbursement of overburden expenditures incurred prlor to 2006 (see MatterofCountyofNiagara v. Shah, Sup Ct, Niagara County, Nugent Panepinto, J., June 18, 2013, Index No. 149492-2013; Matter of County of St. Lawrence v. Shah, Sup Ct, St. Lawrence County, Demarest, J., July31, 2013, Index No. 140712; Matter of County of St. Lawrence v. Shah, Sup Ct, St. Lawrence County, Demarest, J., July 31, 2013, Index No. 140998; Matter of County of St. Lawrence v. Shah, Sup Ct, St. Lawrence County, Demarest, J., August 30, 2013, Index No. 0141656; Matter of County of Chemung v. Shah, Sup Ct, Chemung County, O'Shea, J., November 19, 2013, Index No. 2013~1849; Matter of Chautauqua County v. Shah, Sup Ct, Chautauqua County, Chimes, J., December 9, 2013, Index No. 2013-1266; Matter of Jefferson County v. Shah, Sup. Ct, Jefferson County, Janua1y 15, 2014, Gilbert, J., Index No. 2013-1956). 6 Given the substantial difference between petitioner's original December 6, 2012 claim, and the amended claim received December 17, 2012, the Court agrees with respondents that the latter date is the measure of timeliness (i 8 NYC RR §601.4), and that respondent's rejection of petitioner's claim on March 17, 2014, was therefore timely. 2 However, given such, respondents may not now supplement their determination to deny petitioner's initial claim on alternative grounds (Matter of County of Niagara v. Daines, 79 AD3d 1702). Nor does the Court accept petitioner's sophistic argument that Section 61 barred only the claims and not the State's obligation for further reimbursement of overburden expenditures. However characterized, it is clear on the face of the legislation and from the Memorandum in Support that it was intended to deny further reimbursement to alleviate that cost to the State. Section 61 does not, on its face, repeal §368-a, and defendants insist that it does not. However, as advanced by petitioner, even an implicit repealer would run afoul of §93 of the General Construction Law, prohibiting the repeal of statutorily vested rights (compare County of St. Lawrence v. Shah, supra at 1553 - 1554). In any event, it is axiomatic that "(a)lthough a statute is not invalid merely because it reaches back to establish the legal sighlficance of events occurring before its enactment, a traditional principle applied in determining the constitutionality of such legislation is that the Legislature is not free to impair vested or property rights" (Matter of Hodes v. Axelrod, 70 NY2d 364, 369 - 370). 7 Therefore, in view ofthat principle and the foregoing cases at nisi prius, this Court concurs in the conclusion that Section 61 retroactively impairs petitioner's vested right to reimbursement of overburden expenditures and is therefore unconst[tutional. Assuming arguendo that petitioner could have moved more quickly in identifying and collecting reimbursement for the additional overburden expenditures, there appears no time Hmit for claims under §368-a(1 )(h); and, mere lateness, without undue prejudice as a result of the delay, does not give rise to a defense of I aches (see generally Premier Capital v. Best Traders, 88 AD3d 677, 678; Sparkling Waters Lakefront Association v. Shaw, 42 AD3d 801, 803). Thus, it remains that respondents have had and continue to have a mandatory obligation under §368-a(1)(h) to reimburse petitioner for overburden expenditures covered by §620 and 621 of the laws of 1974, through December 31, 2005. It is questionable whether this Court has jurisdiction over petitioner's stand- alone cause of action for unjust enrichment ( Sarbro IX v. State of New York Office of General Services, 229 AD2d 91 O; but cf Matter of Gross v. Perales, 72 NY 2d 231); but, in any event, that cause of action is academic. Further, "no authority has been called to [its] attention for Imposing a constructive trust against one governmental entity for the benefit of another" (Faflica v. Town of Brookhaven, 69 AD2d 579, 589); and, given the assets and credit of the state, such relief would appear unnecessary (Matter of Yannotti v. D'Efia, 117 AD2d 609, 610). 8 .1 I Accordingly, it shall be and hereby is: ORDERED, ADJUDGED AND DECREED, that respondent's objection in point of law number one, that the petition-complaint fails to state a cause of action, is denied. ORDERED, ADJUDGED AND DECREED, that respondent's objection in point of law number two, that respondent's March 17, 2014 determination was not arbitrary, capricious and contrary to law, is denied insofar as it was contrary to law. ORDERED, ADJUDGED AND DECREED, that respondent's objection in point of law number three, that Chapter 61 bars reimbursement of petitioner's clain1, is denied; ORDERED, ADJUDGED AND DECREED, that respondent's objection in point of law number four, that the petition is barred by the doctrine of !aches, is denied; ORDERED, ADJUDGED AND DECREED, that respondent's objection in point of law number five, that respondent's March 17, 2014 denial of petitioner's 11 reimbursement claim was timely, is granted. 1 1,' l I ORDERED, ADJUDGED AND DECREED, that petitioner's first cause of action, for mandamus based upon respondents' default under i8 NYCRR §601.4 is dismissed on the law. ORDERED, ADJUDGED AND DECREED, that petitioner's second cause of action is granted to the extent that respondents are hereby directed to comply with the mandatory duty enjoined upon them by law to identify, calculate, and verify the 9 .i : l total unreimbursed overburden local share payments made by petitioner prior to January 1, 2006, and to reimburse petitioner for such payments. Further, the Court hereby grants leave for further discovery on the issue (CPLR §408) and) if necessary, will appoint a referee to the extent necessary to supervise the discovery process (CPLR §3104) and determine the final accounting (CPLR §4317[b]; City of Poughkeepsie v. Poughkeepsie Associated Fire Department, 125 AD2d 522). ORDERED, ADJUDGED AND DECREED, that petitioner's third and fourth causes of adion are granted insofar as it is hereby declared that Section 61 is in violation of §93 of the General Construction Law and/or unconstitutional and therefore invalid, null and void. ORDERED, ADJUDGED AND DECREED, that petitioner1s fifth cause of action, for violation of various statutes relating to state and local government, is dismissed as academic. ORDERED, ADJUDGED AND DECREED th_at, based upon the constitutional violation, petitioner's sixth cause of action is granted to the extent of partial summary judgment against respondents in the amount of $313, 134, plus statutory interest. ORDERED, ADJUDGED AND DECREED, that petftioner,s seventh cause ·of action for unjust enrichrner1t is rusmissed as academic. ORDERED, ADJUDGED AND DECREED, that petitioner's eighth cause of action, for a constructive trust, is dismissed on the law. 10 Proceed accordingly. The foregoing constitutes the Decision and Judgment of the Court. Dated: May /~ 1 2014 Batavia, New York HON. ROBERT C. NOONAN Acting Supreme Court Justice 1. The failure to credit petitioner with the full amount of overburden reimbursement to which it was entitled may also adversely impact petitioner's obligation under the "Medicaid cap" going forward by altering the baseline (Stormer at 9f76). 2. Although petitioner argues that "respondents have offered no authority for the proposition that they can restart an unequivocal deadline simply because there was an alleged non-substantive change to the underlying claim" (4/23/14 Buckey affidavit at 8 r fn 1) I this Court would not find the $27' 103 change 0 non-substantive 11 , and petitioner has itself offered no authority for the proposition that it can impose a prior deadline after such an amendment of its claim. Therefore, in the spirit of fairness in which this proceeding has been brought1 the Court will not deny respondents the full benefit of the 90-day determination. 11 I ii i Matter of County of Jefferson v Shah Index No. 2013-1956 . ..----. At a Term of Supreme Court held in and for the County of Jefferson1 in the City of Watertown, New York on the 141h day of November, 2013. PRESENT: HONORABLE HUGH A GJLBERT Supreme Court Justice STATE OF NEW YORK SUPREME COURT COUNTY OF JEFFERSON In the Matter of !J>. COUNTY OF JEFFERSON1 Petitioner-Plaintiff, For a Judgment Pursuant to Artlcle 78 of the Civil Practice Law a11d Rules and a Declaratory .Judgment Pursuant to Section 3001 of the Civil Practice Law and Rules -against~ ~~IRAV 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, Respon dentsw Defend ants. PECISION Index No. 2013-1956 RJI No. 22-13~0863 The Petitioner, County· of Jefferson ("Countyn) 1 seeks 1o 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 September 4, }JoV .----... 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 ah expeditious and essentially uniform procedure for judicial review of challenges to actions, or inaction, by agencies and· officers of state and locaf government. The law Is well~ settled that a court may not disturb an administrative decision unless the agency's action was arbitrary and caprrclous; in violation of lawful procedures or made in excess of Its jurisdiction. Matter of Sc:hatz v, Department of Consumer Affairs of ;,,. the. Cfty of New York, 177 AD 2d 324, 326 (1991). Petitioner believes that the partie:;; have. a close relationship arising from their joint admfnistratlon of the New York State Medlcal Assisiance Prograr.o, 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, lncluding full disclosure, fair dealing, the providing of instruction and training on all aspects of medical assistance laws, regulations, practice$, and procedures. Even accepting this premise to be accurate, a significant issu? arose . concerning the obHgation 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 ,.... ' .,.--... .,..... .. judicial decisions but then emerged when the Legislature enacted what will be referred to as Sectron 61 of the 2012-2013 budgei blll swbmitted by the Governor of th~ State of New York. Section 61 is geared to reverse the judiclal determlnations requiring the payment of pre-2006 overburden payments by the counties, with an April 1, 2012 deadline established far the submission of claims. In this regard the Petitioner cf lrects t11e Court's attention to Social S$rvlces Law §368~a. entitled "State Relmbursements!'. 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 12, 2013, Petitioner submitted claims for reimbursement of overburden expenses to the Respondents in the amount of $114,501.50. These claims were rejected in r September 201q 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 Responden1s 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 Complaint The. Respondents perceive the proceeding commenced by Pettt!oner to qe a hybrid mechanism challenging the ruling of the 3 ,,----... DOH as to the· unconstitutionality of Section 61, a declaratory Judgment, an arbitrary and capricious determination, subject to mandamus to oompel, and in violation of certain St.ate law contract and tort provisions. Petitioner believes that it, like other counties throughout New York State, is responsible pursuant to the Medical Assistance Program for providing medical ass1stance payments to eligible patients. Petitioner further believes that the Leglslature had ·eliminated a former obllgatlon of each county to pay its fifty percent of the Medical Assistance costs. The Legislature en acted what Petitioner describes as "hold harmless" provisions requiring Respondents to reimburse each county for the costs incurred for assistance to certain indigent1 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 of the Budget Bill could not nullify the statute~ provision that the county Is obllgated to pay these ov~rburden expenses in the first instances, jointly administer the medical ~ssistance program with Respcmdeni::s, then Respondents reimburse each county for its payments of these overburden expenses. The Respondents explain that, with regard to fee~for-seNice Medicaid, medical providers submit claims for payment to the fiscal agent of the 4 :r l'H:ll IVY r\Ut7Vl,.UllllC)l1I V V• IV .• r---... Section 61 was not incorporated into a proposed amendment of Social Services Law §368-a, voted out of the appropriaie 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 bfll as one of its multiple sections. This was not sufficient to effectively amend §368-a . . C0nsequently, as previously noted, the June 13, 2013 claims for overburden expenses and the September 2013 rejection thereof by the Respond$nts 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 ~ct done, offense committed or right accruing, accrued or acquired, or !!ability, penalty, forfeiture or punishment incurred prior to the time such repeal takes effect, but the same may be enjoyed,· asserted, enforced, prosecuted or inflic1ed, as fuHy and to the same exten1 as lf such repeal had not been effected.'' Dating back to 1909 this provision establishes the principle that an accrued right under a statute continues beyond the repeal of that particular statute. Matter of Lavfnelia, 166 AD 460, 463·464 (1915). In the first cause of action, Petitioner seeks an order and judgment 14 :c L J'iClltvy l\.\JOO' Vl.Un,101,' \J -~ _.,,.~. pursuant. to CPLR 7803(1) compelHrig and directing Respondents to comply with the mandatory duty enjoined upon ihem to reimburse Petitioner for the overburden expenses that Petitioner incurred prior to Januaiy 11 2006. The extraordinary remedy of mandamus will-look ohly to compel the performance of a ministeriat 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 mlnlsterlal act. Has Section 61 changed this reaUty as Respondents contend it has? This Court respectfully does not believe that It does. With regard to rellef 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 6'\ 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 that Article 61 is a fresh attempt to prevafl. ln other words, if there W$S no Section 61 preventing reimbursement, there would be a judicial mandate to reimburse. The Court has previously referred in detail to the conflicting interpretations of the parties with regard to Section 61. The Petitioner is hopeful that 15 l"ICltlU)'l\V.,:)V'l....)lrVJIJIQl 1 1 u P·>' this Court will adopt the line of thought of the Supreme' Court in Niagara County v. Shaw, which accepted the reasoning of the Court of Niagara, and rejected tile defenses asserted by Respondents based upon Section 61. It treated the Petitioner's claim for mandamus under Social Servic~s Law Section 368~a as it existed at the time that the County incurred the overburden expenses, annulled the reimbursement dehlals by Respondents, and directed Respondents to pay the claims. Consequently, the County of Jefferson stresses that §368-a expressly granted reimbursement at the time this county 'made the Medical Assistance )> • payments resulting in a clear right to rec~lve reimbursement. The Court concurs with Petitioner that Respondents have a rne:indatory duty to reimburse the expenses. Petitioner also contends that !t had no obfiga.tion to submit claims for overburden expenses since It was Respondents' statutory obligation to calculate the total reimbursement liability in ac~ordance with §368-a. Petitioner thereby concludes that Section 61 does not alter Respondents' underlying obligation to calculate the total reimbur$ement liability and pay what is owed. In essence, Petitioner Is trying to explain that it never has been, nor is, a responelblllty of a county i:o l!>Ubrnit 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 loollUI 11 ll:ll' l"\.J f.l.J 0 ~---. 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. Thls view of the Petltioner appears accurate. Irr 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 1he effect oi a final judgment as to the rights and other legal relptions of the partles to a justifiable controversy whether or not fw:ther 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. Bail,W, 279 AD 650 (1951, affd 304 NY 669 (1952). The Petitioner asserts that Section 61, deprives it of a vested right to reimbursement for these overburden expenses without due process !n violation of Article !, Secfion 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 o! its vested r\ghi to reimbursement. The Court agrees with the Petitioner. The third cause of action also asserts that Petitioner is entitled to a 17 .\ l,C111vy 1\.VQ'OV\..Vl$1101 1 1 \,.I ,...., tV _.----..,, .... ._., declaration that Sec1ion 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 proiected and statutorily guaranteed vested rlght to reimbursement. Petitioner fuither asserts that DOH'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, ahd void. Petitioner urges that it has a constltutlonaUy . protected and statutorily guaranteed vested right to the requested reirnburnement. Petitioner sets forth that Respondents colleoted from Petitioner paymehts for the expenses for treatment of G-vBfb-.i...:rden-queJified patients so as to have. a proprietary interest in the funds so collected. Petit!&.1er continues that these funds were raised by real property and sales taxes which became the property of Petitioner since they we.re obfained without any legal basis by Respondents and in contravention of State constltutlonal and statutory prnvisions which guarantee Petitioner's vested rights. Petitioner further cites Section 11 (4) of the New York Sl'atut~ of Local Government for a rule that the State is prohibited from enacting a law that repeafs, diminishes, 18 fi )> ll '1 ! ;.,~ )'• I, ....... ,,...,_, I,....,..._..._.. .......... 110'-t'll I ._ l""'l.--V ···-.. Impairs or suspends a right or power relating to the property of local government. Petitioner also cites Article !X, Section 2(b)(1) of the New York Constitution and Section 2 of the Statute of Local Govemmenis to support the theory that Petitioner's proprietary interest in the funds collected by Respon .... -. i I 2006, There appears to be a consensus that where legislatlon has . . retroactive effects, judicial review does not end with the Inquiry generally 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~~xisting law, the extent of retroactlvity and the nature of the public interest to be served by the law in order to accomplish a determination whether the rlgflts affected a.re subject to alteration by the legislature. Alliance of American Insurers v. Chu, 77 NY 2d 573, 586 (i991). The Court does not concur that this consensus is applicable to the manner by which Section 61 came \nto being or Its devastating impact upon vested rights. Nevertheless, the Court shall evaluate these points. Maintaining a comprehensive legal approach, the Respondents coniinue 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 tllat attach to completed 1ransactions is not as broad as Its power to regulate future transactions. Aflianae 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 fnflexible view 22 I , I I I 11 I I I 1 l I I . l .·--. of the rlght of the legislature to pass retroactive legislation. Matter of Chrysler Properties, Inc. v. Morris, 23 NY 2d 515 1 518-19 (1969). Consequently, while there is a persisting aversion to retroactive legislation generally, New York has noted that modem oases reflect a less rigid view of the legislature's right \o pass such legislatipn and more candid consideration-on a case-by-case basis--of the various policy considerations upon which the constitutionality of retroaot1ve legisfation depends. Matter of Hodes v. Axelrod, 70 NY 2d 364, 371 (1987). · lhe Respondents respectfully submit additional factors which they interpret as affirmatively weighing In their favor. Section 5·1 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 appfylng a balance test the result is not favorable to the Respondents, A posrtive 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 dtppirrg into Medicaid funds whlle 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 tssue. 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 t0 ..... ll'-''1 .. ..,.¥V~ ... ._.llll..,.~\I....., .-... , ......... the old calcu latlons; 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 gqvernment were to disaHow Federal flnahclal participation for Medicaid. Respondents calculate that this Petitioner has saved more than $4.4 million due to the advent of the oap 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 Sta.te. 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 law to its detrirneni must be discounted by the fact that its reliance was based upon a misinterpretation of the law, under which it enjoyed a windfall. Petitioner is belleved to have enjoyed more than thirteen million dollars ln 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 hundred fifty thousand ($750,DOO.OO) dollars ln 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 qy the courts and deny Petitioner any judicial review of Respondents' denial of reirnbursemenl R~garding 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 approximaiely 2009, when DOH first rejected its claims and assBrted th8 cap as a defense. Respondents furttier c0nte11d that Petitioner should have submitted its claims for reimbursement a long time ago uslng the reports and data that DOH made available to Petitioner and other districts regarding overburden expenses, In other words1 Petitioner had ample notice to submits Jts pre-cap overburden claims by April 2012 or forfeit reimbursement. Respondents submit that these factors millg_ate against a finding of retroactivlty and tip the balance further in favor of Respondents. The Petitioner has certainly been aware for a period of 1ime about Respondents' legal defenses but these defenses had appeared prior to April 1, 2012 to be unsupportive or re alls tic. As fo the issue.of timely filing, we concur with Petitioner that lt could not file until it determined that an original entitlement was 25 t ........ 1 ..... 1 • ~ ............ - .......... , ...... ,' - overlooked or disregarded. The Respondents acknowledge that on balance the pubHc interest to be served by Section 61 tips decldedfy In favor of Respondents and the State taxpayer. Respondents refer our attention back to the litany of beneflts for Sociaf Services districts listed in its supporting affidavits and closing papers. Respondents then predict a d~vastatlng effect upon the State's administration of the Medicaid program ·If Section 61 is not upheld and Implemented. Again these benefits sterp back to the 2005 cap. statute rather than to Section 61 which came into existence April 1, 2012. The balance of public Interest ls t~at counties be paid whafthey are owed. Respondents do not view any violation o'f due process rights in either 0) the enactment or implementation of Sectlon 61. Respondents consider a retroactive statute that is. clarlfylng 1n nature to satisfy constitution al due process CC:ICer.".S 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 antlquated overburden claims,' bordering on laches. Again, the Court respectfully disagrees wfth the Respondents. 26 I "~I I'•-'.)' I '\V¢io Vl-VI 11 lr;:Jl t I V µ,.:..u The fifth cause of action earls for an order and judgment awardtng Petitioner the sum of $114,501.50, plus statutory interest. In this regard Petitioner charges that Respondents are currently unlawfully retaining Petilioner1s property and/or lmprnperly interfering with Petiiloner's right to reimbursement. Petitioner asserts that Respondents have refused to reimburse Petitioner for these overburden • expenses. In th ls regard, the Petitloner 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. Thyroff v. 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 lrnproperly retained the- funds for their own benefit Petitioner believes that it has e. 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 Networkr 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 app!led 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 ' . i :r:r payment, the Respondents have been unjustly enriched. Petitioner asserts that' permitting Respondents to retain .the Petitioner's reimbursements plainly would be against equity and good conscienoe because that would permit the State to abrogate its undisputed debts to Petition&r unfl:aterally, without any legal justification [ whatsoever. The Petitioner believes that Respondents received moneys belonging to Petitioner, that Respondents benefltted from the receipt of such moneys and that Respondents should not in good conscience be permitted to retain $UCh 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 restitutron to the Petitioner. Blue Cross of Central New York v, Wheeler, 93 AD2d 995, 996 (1983). · The Respondents perceive no unjust enrichment A9ain, Respondents asserl 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 ls 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 agenGy, A seventh cause of action seeks to impose a constructive trust over 28 tJoVV the funds that Respondents were obltgated to pay. Petitioner for Medical Assistance payments made on behalf of DOH prlor to January 1, 2006. Petitioner belies that administering the Medical Assistance program to ensure that certain mEintally disabled medical assistance recipients did receive the medical care that they needed, The Petitioner asserts that Respondents have fai!ed to ensure that proper overburden expenses were identified and paid, have concealed material Information . . . from local districts, have knowingly denied State liabilities, and have failed to completely discharge their duties to the Petitioner. The purpose of a constructive trnst is prevention of unjust enrichment by even an innocent party. Simonds v. Simonds, 45 NY 2.d 233, 242 (I 978). Generally, a constructive 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; Shatp v. Kosm.alski, 40 NY 2d 199, 121 (1976). . . The Respondents deny any improper motlvatioh andfor a Jack 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 clte the law prior to the enactment of Sectton 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 ;:<> l'iCHtvy ''v~o \....OL'-'llf!Qf, I v fJ•VI not belleve that it Is appropriate as to the State of New York or a State agency. The Respondents seriously question the applicability of Artlcle 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 er~or of law, or was arbitr:ary and capricious or an abuse of dlscreHon, or was irrational. Matter of Simmoy v. Bos.rd CJ( Town Trustees of Town of Southofd, 61 AD 3d 763, 764 (2009). Respondents question how 1he denial or rejection could be an error of Jaw when Section 61 is so clear and unambiguous; was arbitrary or capricious or an abuse of discretion when it conforms to the letter of an exlstlng $tate law; was irrational when implementing a clear statutory mandate? DOH applied Section 61 as wriiten. Respondents assert thatthere is a distinction between DOH misapplying, or l Improperly. interpreting Section 61 and D.OH's use of Section 61 to deny J reimbursement.. DOH believes that it took no action other than that expressly I I ) J TT!arviated upon it by the legislative enactment of Section 61. - I l ! 11 1 The Court respectfully disagrees with the Respondents. The legislatio11· 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 ,...-...., ............ . . This constitutes the Decision of the Court. Petitioner's counsel shall subml'i a proposed Order on notice to Respondents' counsel. Dated: January 15, 2014 at Watertown, New York ENTER Matter of County of Monroe v Shah Index No. 2014~3162 SUPREME COURT STATE OF NEW YORK COUNTY OF MONROE fo the Matter of the COUNTY OF MON1ZOH l)e.titio110r -PlaJntift: For u Judgenw.utPursuatiHo Article. 78 ofth~.Civil Practice Law and Rnles aitd ~ Declara~ory Judgtn!lnt Pursuanl Lo Sectto·n 3001 afth.e C:ivil·.P1'actice I.aw and Rules aguinst Index#: 201.4-3162 NIRA \IR. SHAH. tvl.D., M.P.11, as·Commissioncr of ihe New York State De.1n1rtm Nlrnv R: S·hah, i'.vLD., M.P ,ll.; as !'b~ Commissioner of the NY State Depl'.lrtmenl.of Health.and-the NY State Dermr!ruent of Henlth dated Febt'uary 14, 2014 and Mm-ch 6, 20 14 deJ)Jing Petitiol1e:r' s c1Mms.fi1r reirnbnrserncnt oMbe overbmden expenses llt~lt Petitio11et ll.1cuned on behalf ofRespondents prior todei1dltures Inc1uT-cd prlor·toianum:y 11 2006. (See Mwter o/Coun(y. c~{St Lawrence v. Daines, 81AD3d2J2,.(3Jil De.pt;, 2011); },([atter·ofCou11tyofEriav. Datnes, 83 ADJd 1506; (411> Dept., 2011); Nfatler·-o..(COimly ofNfagara v. Daines, 79 ADBcl 1702, (4111 Dept., 2010); Matter q(fferkimer v, .DaCnes, 60 AD3.d M60; (tPH Dept, 2009).; See Chem1rng Coumyv, Shah et. al., [mle.~ # 10 l3-184.9, (Sup. Ct. Chemung County, Justfoe o~S-he.a, 11/'l 9!Z01J)). 'I11e Th !rd Department 1\1,l:ther: ~1elcl that. the reiipm1denls .could not retro~otl v.ely avoid. the if statutory reimbursemen.t cibllgations under Social Se.rvices Law Sectiol'l 368-~1. (Marter of Cow Uy a/SJ. Lawrence v. Shah, 95 AD3 and attorney's foe8 is drnied; and it is further ORDERED that tb<:l remaining refiefrcquc$led in the petition ts· den.led as v.01>.demic, This shall com:titutc the Decision rmd Order of the Co lilt .. ENTER Dates right to reimbursement for pre-2006 Overburden costs under Social Services Law§ 368-a; 'WHEREAS, Petitioner served the Reply Affidavit of Nancy Rose Stormer svvom to May 16, 2013 and the Affidavit of Christopher E. Buckey swom to May 17, 2013 on May 17, 2013 and opposed Respondents' motion for summary judgment and cross-moved for srnnmary judgment on its declarato·ry judgment and state law plenary claims and to st·ike ont certain paragraphs of Respondents' Verified Answel' on the ground that those paragraphs did not contain a responsive pleading to an allegation contained in the Verified Petition and Complaint. 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) the plain language of Section 61 bars reimbursement for clain1s that Petitioner was not obligated to submit, and does not impact Respondents' unilateral and nondiscretionru:y statutory duty to ca.Jr-,.,ulate the total reimbuxsement liability under Social Services Law § 368-a and pay Petitioner for the amounts owed; (2) Respondents> decades-Jong course of intentionally or negligently dilatory conduct permitted thfa Court to apply Social Services Law § 368~a as it existed at the time that Petitioner incuned the Overburden expenses on Respondents' behalf, without consideration of Section 61, under the special facts exception; (3) Section 61 is not a clarifyjng amendment, but is a substantive deprivation of Petitioner's vested rights to reimbursement for Overburden expenses incurred prior to January 1, 2006 that is being retroactively applied; ( 4) even if the statutory and 2 regulatory bases for Overburden reimbursement had been repealed, Petitioner's vested rights to reimbursement must survive plu·suant to General Construction Law§ 93; (5) Section 61 deprives Petitioner of due process of law; (6) Respondents' defenses based on the doctrine of laches and L 2010, ch 109, pm.tB, § 24 (the "2010 Amendment") are barred by collateral estoppel; and (7) Section 61 does not bar Petitioner from recovering for conversion, unjust enrichment, and constructive b.ust; WHEREAS, the paiiies stipulated, with the approval of this Court, that Petitioner would serve an Amended Verified Petition and Complaint to include Respondent<:' denial of two additional claims of Petitioner for reimbursement of overburden expenses that Petitioner iJ1cuned on behalf of Respondents prior to January 1, 2006, which additional claims totaled $702,219 .42, bringing the total amount of unpaid overburden reimbursement at issue in this matter to $2,780,854.86; that Respondents would serve a Verified Answer to the Amended Petition without the paragraphs of the Verified Answer, dated May 3, 2013, that were the subject of that portion of Pe1.itioner' s cross motion that sought to stJ:ike out those paragraphs; that Respondents' Verified Answer to the Amended Petition would supersede the Verified Answer, dated May 3, 2013; and that Petitioner would withdraw that portion oflts cross motion that sought to strike out those paragraphs; WHEREAS, Petitioner served the Amended Verified Petition and Complaint, dated May 21, 2013, purst1ant to the parties' stipulation; WHEREAS, Respondents served the Verified Answer to the Amended Petition, dated May 23, 2013, without the paragraphs of the Verified Answer, dated May 3, 2013,.that were the subject of that portion of Petitioner's cross motion that sought to strike out those paragraphs, pursuant to the parties' stipulation so ordered by this Cou1t; 3 WHEREAS, Petitioner thereupon withchew that portion of its cross motion that sought to strike out certain patagraphs of Respondents' Verified Answer on the ground that those paragraphs did not contain a responsive pleading to an allegation contained in the Verified Petition and Complaint and, on June 3, 2013, served the Reply Affidavit of Nancy Rose Stom1er sworn to May 29, 2013 and the Affidavit of Christopher E. Buokey sworn to June 3, 2013 in fmther support of Petitioner's cross-motion fm summary judgment in accordance ·with the parties' stipulatiou; WHEREAS, the Court having heard orai argument of counsel for the patties 011 June 6, 2013; an.d NOW, upon due consideration of all the pleadings and proceedings in this matter an.d the oral argmnents of counsel, it is hereby ORDERED, ADJUDGED AND DECREED that, for the reasons set forth in Petitioner's papers, the defenses asserted by Respondents based upon Section 61 hereby are rejected; and it is i\niher ORDERED, ADJUDGED AND DECREED that, for the reasons set forth in Petitioner's papers, Respondents are precluded from retying on Section 61 as a ground to deny Petitioner's claims for reimbursement of the Overburden expenses that it h1Cltrred on Respondents' behaif prior to January 1, 2006 due to their intentional or negligent delays in calculating and paying Petitioner the tota.1 Overburden liability owed until Section 61 was enacted; and it is further ORDERED1 ADJUDGED AND DECREED that, for the reasons set forth in Petitioner's pa1Jers, Petitioner's claim for mandamus to compel is treated under Social Services 4 Law § 368-a as it e:xlsted at the time that Petition.er inc.uned the Overburden expenses on Respondents' behalf, pursuant to the special facts exception~ and it is further ORDERED, ADJUDGED AND DECREED that, for the reasons set forth m Petitioner's papers, Section 61 does not extinguish Respondents' unilateral obligation to oalculate and reimburse Petitioner for the Overburden expenses it incurred on Respondents' behalf prior to January 1, 2006, pursuant to Social Services Law § 368-a; and it is further ORDERED, ADJUDGED AND DECREED that tl1e Amended Verified Petition and Com.plaint is granted in part and denied in pa1t; and it is further ORDERED, ADJUDGIW AND DECREED that the determinations of Respondents, dated December 12, 2012, December 17, 2012, December 28, 2012, January 10, 2013, January 11, 2013, January 15) 2013, Jannary 23, 2013, and April 10, 2013, purporting to deny Petitioner's claims for reimhmsement of the Overburden expenses that Petitioner incurred on behalf of Respondents pdor to January 1) 2006~ pursuant to Social S~rvices Law § 368-a, are hereby annulled; and it is fmther ORDERED, ADJUDGED AND DECREED that Respondents are directed to forthwith allow Petitioner's claimB for reimbursement and pay $2,780,854.86 to Petitioner wit11in 30 days of service of Notice of Entry of this Order and Judgment; and it is fmiher ORDERED, ADJUDGED AND DECREED that Respondents are directed to forthwith: (A) provide lo Petitioner all information necessary to identify, verify, and dete11nine the total Overburden expenses that Petitioner incurred on Respondents' behalf prior to January l, 2006, pursuant to Social Sel'vices Law § 368-a; (B) in cooperation with Petitioner and Petitioner's counsel, identify, verify1 and dete1mine the total Ovel'burden expenses that Petitioner incmred on Respondents' behalf prior to January 1, 2006 using the RF3 claims submission process; and (C) 5 pay to Petitioner the total Overburden expenses that Petitioner incurred on Respondents' behalf pdor to January 1, 2006, for which Petitioner has not already received reimbUl'sement pursuant to Social Services Law§ 368-a; and it ls fmiher ORDERED, ADJUDGED AND D.ECREED that the remaining relief requested in the Amended Verified Petition and Complaint is denied as academic. Dated: Niagara, New York June JJt, 2013 SO ORDERED, {}£171t·· Hon. Catherine Nugent anepinto Justice of the Supreme Court GRANTED 6 Matter of County of Oneida v Shah Index No. 2013-1788 02/28/2014 16:39 31579!354% SUPREME COURT PAGE B3 At a tenn of Supreme Court of tbe State of New Y 01·k held in and for the County of Oneida at the Oneida County Courthous~, 200 Elizabeth Streeti Utic11.i New York on the 28th day ofFebruary 2014, PRESENT: HONORABl.,E BERNADETTE T. CLARK Jus1k'\l fres.i.dmg ST A TE Oli' NEW YORK SUPREME COUHlf COUNTY OF ONEIDA In the Mattel' of Petiti~)ner-~Plaintiff, For a Judgment l 11 11rsuant to Artkie 78 of the Civil Prnc.ttce Law and R~~ks and~ Declsr:ah'.1ty .Judgment Pursuant to Scctkn 3'00l of the Civil Practice Law NIR..4. V .R SHA.Bf:· MJ),~ .M.P.H.i as Commis~ioner of the New York St~r~e Depa:rtment of Health and TilE NEW YORK ST111 TE DEPARTMENT OF HEALTH Respondents-Defendants Procedural llistory Index No. CA2013-001788 RJINo. 3;2.-13-088:2 .Ded$iQn. and Order On Augu::rt 29, 1013, Peti.t.ion.e:r filed a Notice of Petition, Verifted Petition and Complaint, the Ail"kla:vit of Christopher E. Buckey with exhibits and Memorandum of Law. On October 15) 2013, '.le;:ponden1:$ filed ru1. Amnver to the Notice of Petition and on Octobe1· 221 2013 Petitioner fik·d a Notice of Amended Verified Petition and Complaint and· an Amended Verified Petition a.nd Complaint. On or about October 30, 2013 Respondents' filed an Amended Verified Answer ti:: the .Petition and Complaint along with a Motion for Summary Judgment on the Declaratory Juc:'.gmeni claims. .) 02/28/2814 16:39 3157986435 SUPREME COURT PAGE @ 201.3; Mem.or.an.du1:n 1)fLaw i:n Support of Respondents Motion for Summary Judgment on the Declaratory Judgment Claims and Respondent$' Answer to the Article 78 Claims dated October 29, 2013; Notice o:: Am.ended Verified Petition and Complaint al.ong wjth Amended Verified Peiiti.on and ·Comp lai.nt dated October 1. 7, 2013; Respondents' Amended Verified. Answer filed in co11ju11ctlon. with tbepartl.es' Stipulation.and Order dated October 17, 2013; Reply Affidavit \:vi.th 11ttacbments ofN1;1.ncy Rose Stormer, Esq., SVl.'i'.rrn to October. 18, 2013; and Affidavit of Chdstopher K Budde)', Esq. with attachments sworn to on October 18, 2013, Petitioner .:rneks the following reli.ef: (l) annulling the dete~inat3o:ns of Respondents N irav R. Shah, lvt f),, fvLP.H., $S the Commissioner of New York State Department of H~ and the New York State Department of Health (collectively, "Responden1:s") dated August20, 2013 and October LO, 2013, purporting to deny ~etitioner's claims for reimbursement of the overburden expen:1 es th at Pet.i.tio:uer io.cun:ed on behalf of Respondents prior to January 1, 2006, pursuant to Sod.al .Services Law Section 3 6E~a, as arbitrary and capricious and/or affected by an error of law; (2) compelling and directing Respondents to approve Petitioner's claims for reimburseme11t of 1 ho overburden expenses that Petitioner incurred on behalf of Respondents · 2 ' '"i 02!28/2014 1G:39 315798&435 SUPREME COURT PAGE 85 prior to January 1, '.W06, purs"\lant to Social Services Law Section 368-a; (3) compelling Respondents to caku!ate and pay the total remaining overburden reimbursement due an.d owing to Petitioner pursu~mt to Social Services Law Section 368-a; ( 4) declaring Section 61. o-f Part D of Chapter 56 of the Y., aws of 2012 unconstitutional, invalid and void insofar as it deprives Petitioner of veste(; property ri.~htS without due process of law in violation of Article I, Section 6 of the Now York Constitution; (5) declaring Section 61 of Part D Of Chapter 56 of the Laws of 20 I 2 unconstitu.tional, Invalid and. void insofar ss it violates St:;rtute of Local Governtnents Section 11(4) or, \'J.)~ernatively, Article Xt. Sectfou 2 (b)(l) of the New York Constitution and St~tute of Local Gi:•vei:i:unents Section 2; (6) awarding Petitioner darnagey in ll!l amount to be determined at the :f:nal resolution of this matter, but in no event less than $3,123,878.56, together wilh interest; (7) imposing a constructive trust over the funds that Respondents were obligated to reimbrn:se to Petjtinner., pursuant to Social Services La.w Section 368-a, for the Medioal Assistance payments made on behalf of DOH; (8) awarding Petitioner the costs, disbursements, and attomeys1 fee11 incurred in connection with this proceedh1g; and (9) awarding Pe1itioner such other and further rr:lkf as this Court deems just and proper. Analysis Petitioner'~; argue that HRespondent's have an express, ma·nd13.tory and non-discrntionary statutory duty to n~\m:burse Petitioner for tl1e over.burden expenses that Petitioner incurred on behalf of DOH, in :·:eJJance on that duty. Respondents' can n.ot now rely on a baJd1y retroactive stat\ite to avoid thr:i\r cl.ear duties and impair Petitioner's vested r.igh.t to reim.l>u.rsement.ii (Petitioner's Amended Verified Petition and Complaint p. ZO). Petitionees claim that· Respondents' rcfui;a] to r~imburs<.:l PBtitioner the $3~123 1878,.56 it is owed basi;;d exclusively'on 3 02/28/2014 15:39 3157986436 SUPREME COURT PAGE 05 the retroactive applic arbitrary and capriclous. Tii.e throst i:•f Respondents argument was succinctly stated in their Memorru1dum of Law; "In :ilmplest terms respond.ents contend that further reimbursemeht of ovel'bur.den claims post Cap gives the counties a double dip into the Medic1;1.id coffers. Respondents have consistently maintained this position th-wngh the first and second waves of unsuccessful litigation -at all stops thej:: belief that the Cap statute if properly interpreted, walls 0ff reiff1bnrsement of post Cap overburden claims. The 2010 Amendment attempted to malce the necessary adjustment to the Cap statute, but by virt:ne {)f appellate review failed to acbieve tbe clarity necessary to accomplish what Sectlon 61 hes now finished, With this as a backdrop, it sb.011.ld come as no surprise that the legi.slatm;e epacted Section 61 in ~n atte1npt to onoe and for all clarify or l'emediate the Cap statute so that it unamhiguously captures the intended state of the law, e.g. that post Cap . reimbut$e:tct.et).t for pre-Cap overburden claLins are prohl.b.ited. Because Seclfor.i 61 is a clarifying amendment to a prior Jaw it may be applied retr.oat.tively, despite petitioners protestati.ons ta the contrary.11 (Re:!ip@.dents) Memorandum of Law p. 28) After carefl.tlly revkwing the entire record in tb.is action, considE.lrin.g the argwnents. of counsel as well as lhe focts and legal analysis set forth :in fue recent decisions in Supreme Court, Jefferson County (Gilbert, J., Index No. 2013~1950, November 14> 2013); Supreme Court Niagara County (1<'.1g,cnt-Panepi.nto, J. Il;ldex No. !49492-2013, June 18, 2013), and Suprem<: Court St. La.wrenc1; County (Demarest, J., Index No. 140712, July 31, 2013), this Court, although it attt 2013 denial of Petitioner's reimbursement clal:n:> is hereby annulled as arbitrary, capricious and/or affected by an en:ox of law; and it is furtb1::l' Ordered, tl~.at R!~Spondents are d:lr.ected to calculate, vetlfy and pay any'rnmaining overburden expenS878.56 withtn thirty days of service of Notice of Entry of this Order and Judgement; imd it is ftuther Ordered, tbut Re:spondents Motl.on for Surnmary ,Tudgme11t is denied; and it is further 5 02/28/2614 15:39 3157985435 SUPREME COURT PAGE 08 Otder~d, 1hat Petitioner's request for costs, disbursement and attorneys feed is denied bas<;:d upon Respm:dents' reliance on. tbeir belief that Section. 61 was a cladfying am.endinent and therefore constituti ·Jnal to deny Petitioner's claims; aud i.t is further Ordered, i:ha1; the remaining relief requested in the petition is hereby denied. This shall o"Jn.stitute the Decision and Order of this C Dated: February W, 2014 6 Matter of County of St. Lawrence v Shah Index No. 140712 n.wlo Of:lnlflm~t .LS C. $u(u l°J:tn{;; Cowt •IU C!Wfl Stme\ (;antOll NY 131~ l? d ! • I\ J\STATE OF NEW YORK l! 1) J j.SUPR~ME COU~T COUNTY OF ST. LAWRENCE I l In the Mµtter of \ COUNTY OF ST. LAWRENCE, I 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 Clvll Practice Law ,and Rules I I - against - ! . jNlRAV R. SHAH 1 M.0. 1 M.P.H.1 as Comm~ssioner of !the New York State Department of Health and THE NEW YORK STATE DEPARTMENT OF HEALTH, Respondents-Defendants. Index No. 1407'12 DECISION & ORDER tAS #44-1-·20'13-0103 Appeara~ces: Whiteman, Osterman & Hanha, LLP (Christopher E. Buckey, Esq., Robert S. Rosborough, IV, Esq.; and Monica R. Skanes, Esq., of counsel), and Nancy Rose Stormer, P.C. (Nency Rose Stormer, Esq., and Mfchael Bagge, Esq., of counsel), for Petitioner; Eric T. Schneiderman, Attorney General (C. Harris Dague, Esq., Assistant Attorney General, of counsel), for Respondents. · DEMARES1, J. Medicaid is a publicly funded health program intended to provide medical services to the less fortunate mei'Tibers of society. In New York. the benefits are provided through a combination of sources including the federal, state and local governments. When it was initially implemented, the counties were I required to provide a percentage of the costs according to specific formulae. These 11 I !county costs escalated each year and were substantially increased when the State 11 il ! !began to de-insiitutionalize certain mer.itaily disabled persons, thus shifting the burden I; 1 t . ! \ ! 1 ·" (1N~·1..iing,11ished Petitioner's right to reimbursement for pre-2006 Overburden costs under Social Services Law § 368-a.; WH~!~R~KA.S, ·Petitioner served the Reply Affi.rrnation of Nancy Rose Stormer dated August 14, 2013 and the Affidavit of Christopher E. Buckey sworn to August 14, 2013 on August 14, 2013 and opposed Respondent·>' motion for summary judgment 011 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. beca.use: (1) this Court has expressly struck down Section 61, holding that, insofar as Sectlon 61 attempts to deny Petitioner repayment of obligations ab:eady accrued, it is tmconstit1Jtional; (2) the plain language of Section 61 bar.'l reimbursement for claims that Petitioner was not obligated to submit, and does not impact Respondents' unilateral and nondiscretionary statutory drrty to calculate the total reimbw-sement liability under Social Services Law § 368-a and pay Petitioner for the anwnnts owed; (3) Respondents' decades-Jong course of intent~onally or negligently dilatory conduct permits this Court to apply Social Services Law § 368-a as it existed at the time that Petitioner incm.red the Overburden expenses on Respondents' behalf, with.out consideration of Section 61, under the special facts exception; (4) Section. 61 is not a clarifying amendment, but is a substantive deprivation of Petitior1er's vested rights to reimbursement for Overburden expenses incurred prior lo January 1, 2006 that Is being retroactively appl.ied; (5) even if the statutory t)!ld regulatory bases for Overburden " .. ) reirnbt11:sement had been repeated, P<:;titioner's vested lights to reim.bursement must survive .pursuant to General Construction Law § 93; (6) Section 61. deprives Petitioner of due process of law; (7) Respondents' defense based on the JllfJDGED AND DECllllEED that, for the l'easons set fo1th. in Petitioner's papers, and in this Court's previous decisions in Matter of County of_ St. La·wrence v Shah, Sup Ct, St. Lawrence County, July 3 l, 2013, Demarest> J,, Index No. CV-2013-140712 (attached hereto as Jlt)tJh.iMt A), and Matter of Countx._..of St. Lawrence v Shah, Sup Ct, St. Lawrence County, July 31, 2013, Demarest, J., Index No. CV-2013-140998 (altached hereto as Jitxh!Jbill: B) (collectively the "Recent Decisions"), the defenses asserte.d by Respondent~ based upon Section 61 hereby are rejected; and it is further O.lRIDEMl\ ADJlIJDGElD AND IDECP..EED that, for the reasons set fortb in Petitioner's papers, and in the Recent Decisions, Petitioner's request for an order amrnlling the Respondents' decision dated April 10, 2013 denying its reimbursement claim as being arbitrary, capricious and/or affected by an enor of law is, in all respect'3, granted; and it is fmther rOHJJ)EJR}:D1 ADJllJJQl(}l!J::D AND DECREED that, for the reasons set forth in Petitioner's papers, the Recent Deci<:ions, and in the Third Departrnent's decisions in Matter of County of St. Lawrence v Shah, 95 A.D.3d 1548 (31 ADJIUDGED AND DECJREEJD that, for the reasons set fmt.h in Petitioner's papers, and in the Recent Decisions-, this Court finds that insofar as Section 61 attempts to deny the County repa.yment of obligations already accrned, it is unco11stitutioruil; and it is fmlher ORJD>lf~RE]I), ADJf1UDGED AND ])ECRIEED that, for the reasons set forth in Petitioner's papers, and in the Recent Decisions, this Corut holds that Section 61 does not extinguish Rcsponde11ts' unilateral obl.i.gation to calct1late and. reimburse Peti.tioner fov the Overburden expenses it incurred on Respondents' behalf prior to January l, 2006, pursuant to Social Services Law § 368-a; and it is further 4 O.~lll}ElREll), ADJUDGED AND DECREED that, fol.' the reasons set forth in Petitioner's papers, and in the Recent Decisions, Petitioner's request for an order ill the nature of rna:ndarnus directing the Respondents to review, verify and pay any legitimate claimed overburde11 expenses is granted; and it i.s further OH.JtH~Rltl',]!)~ .AD.RJDG.E)l) AJ'{!) D)JB:Cl~EED that, for the reasons set fo1th in Petitioner's papers, and in the Recent Decisions, Respondents are directed to pay the pen.ding cla.im of $84,203.96 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; and Lt is further 01R)[)lJERED, ADJ/UlDlQEJD AND }[)l]lj',CRJ!l.:lF,D that Respondents are d:b:ected to forthwith: (A) provide to Petitioner a\l information necessary to :identify, veyify, and determine the total Overhurd.en expenses that Petitioner in.cmrred on Respo11dents' behalf prior to Jannary l, 2006, pursuant to Social Sei:vices Law § 368-a; (B) i.n cooperatio1i with Petilionei: an.d Petitioner's counsel, identify, verify, and determine the total Overburden expenses that Petition.er incurred on Respondents' behalf prior to January 1, 2006 using the RF3 claims submission process; and (C) pa.y to 'Petitioner the total Overburden expenses that Petitioner incurred 011 Respondents' behalf prior to Jan:uary 1, 2006, for which Petitioner has not aheady received reimbursement pursuant to Social Services Law§ 368-a; and it is further ORDl~RED, ADJlIJR)GEllJl AN/Dl Dlf!~