In the Matter of Pamela A. Madeiros, Appellant,v.New York State Education Department et al., Respondents.BriefN.Y.September 5, 2017To be Argued by: CYNTHIA E. NEIDL (Time Requested: 20 Minutes) APL-2016-00073 Albany County Clerk’s Index No. 6312-13 Court of Appeals of the State of New York In the Matter of Application of PAMELA A. MADEIROS, Petitioner-Appellant, – against – NEW YORK STATE EDUCATION DEPARTMENT; JOSEPH CONROY, in his official capacity as the Records Access Officer of the New York State Education Department; and JOHN B. KING, Jr., in his official capacity as the Records Access Appeals Officer of the New York State Education Department, Respondents-Respondents. For an Order and Judgment Pursuant to CPLR Article 78. REPLY BRIEF FOR PETITIONER-APPELLANT GREENBERG TRAURIG, LLP Cynthia E. Neidl Attorneys for Petitioner-Appellant 54 State Street, 6th Floor Albany, New York 12207 Tel.: (518) 689-1400 Fax: (518) 689-1499 Date Completed: October 20, 2016 i TABLE OF CONTENTS TABLE OF AUTHORITIES .................................................................................... ii PRELIMINARY STATEMENT ............................................................................... 1 ARGUMENT ............................................................................................................. 1 I. The Records Were Not Compiled for “Law Enforcement Purposes.” ............ 1 II. Disclosure of the Records Would Not “Interfere with Law Enforcement Investigations.” .......................................................................... 5 III. The Records Do Not Contain Non-Routine “Criminal Investigative Techniques or Procedures.” ............................................................................. 7 A. SED Waived Its Right to Rely on POL § 87(2)(e)(iv) by Failing to Raise It in the Administrative Proceeding or in the Trial Court. ............................................................................................ 7 B. The Redacted Information Constitutes Routine Fiscal Audit Procedures, Not Criminal Investigative Techniques. ............................ 9 IV. Ms. Madeiros Substantially Prevailed and Should Be Awarded Reasonable Attorneys’ Fees. ......................................................................... 11 CONCLUSION ........................................................................................................ 13 ii TABLE OF AUTHORITIES Cases Page(s) Beechwood Restorative Care Center v. Signor, 5 N.Y.3d 435 (2005) ............................................................................................. 8 Fink v. Lefkowitz, Matter of 47 N.Y.2d 567 (1979) ................................................................................... 1, 5, 9 Friedland v. Maloney, Matter of 148 A.D.2d 814 (3d Dep’t 1989) ........................................................................ 12 Gould v. New York City Police Department, Matter of 89 N.Y.2d 267 (1996) ........................................................................................... 6 Lesher v. Hynes, Matter of 19 N.Y.3d 57 (2012) ............................................................................................. 7 MacKenzie v. Seiden, Matter of 106 A.D.3d 1140 (3d Dep’t 2013) ........................................................................ 8 New York Civil Liberties Union v. Erie Cty. Sheriff’s Office, 47 Misc. 3d 1201(A), 15 N.Y.S.3d 713, 2015 WL 1295966 (Sup. Ct., Erie Cty. Mar. 17, 2015) ..................................................................... 11 Tax Analysts v. Internal Revenue Service, 294 F.3d 71 (D.C. Cir. 2002) ............................................................................ 2, 4 Trump-Equitable Fifth Ave. Co. v. Gliedman, 57 N.Y.2d 588 (1982) ........................................................................................... 8 Statutes New York Education Law § 4410 ............................................................................. 3 New York Education Law § 4410-c(1) ...................................................................... 7 New York Education Law § 4410-c(2)(d) ................................................................. 3 New York Public Officers Law § 87(2)(e) ........................................................ 1, 3, 5 New York Public Officers Law § 87(2)(e)(i) .................................................... 1, 4, 6 iii New York Public Officers Law § 87(2)(e)(iv) ......................... 1, 4, 5, 6, 7, 9. 10, 11 New York Public Officers Law § 89(4)(b) ................................................................ 7 New York Public Officers Law § 89(4)(c) .............................................................. 10 5 U.S.C. § 552(b)(7)(A) ............................................................................................. 4 5 U.S.C. § 552(b)(7)(E) ............................................................................................. 5 1 Petitioner-Appellant Pamela A. Madeiros respectfully submits this reply brief in further support of her appeal from the Judgment below.1 PRELIMINARY STATEMENT This Court should reject SED’s invitation to expand FOIL’s law enforcement exemption well beyond the plain meaning of the statute. The Court should similarly reject SED’s request to expand the holding of this Court’s decision in Matter of Fink v. Lefkowitz, 47 N.Y.2d 567 (1979), to create a new FOIL exemption that is inconsistent with the statute. SED failed to establish that the records at issue fall squarely under either POL § 87(2)(e)(i) or § 87(2)(e)(iv), and the decisions below should be reversed. ARGUMENT I. THE RECORDS WERE NOT COMPILED FOR “LAW ENFORCEMENT PURPOSES.” The Record establishes that the Audit Plans were compiled by SED as a function of its regulatory oversight, not in the context of any enforcement investigation or proceeding. Similarly, the Audit Plans at issue were created by municipalities to perform, if they so desired, routine fiscal audits of providers to verify expenditures. As such, the records were not “compiled for law enforcement purposes” within the meaning of POL § 87(2)(e). (See Opening Br. at 17-21.) 1 Capitalized and abbreviated terms not otherwise defined herein are defined in the Brief of Petitioner-Appellant, dated June 24, 2016 (“Opening Br.”). 2 SED argues that because the Audit Plans contain “audit techniques” that allegedly serve law enforcement purposes, they were “compiled for law enforcement purposes.” (SED Br. at 27.) This circular reasoning would render meaningless the threshold requirement of the law enforcement exemption. While the burden of establishing that materials were “compiled for law enforcement purposes” may be low, it is not non-existent, particularly where, as here, the withholding agency is not a law enforcement agency and is not acting in an enforcement capacity. See, e.g., Tax Analysts v. IRS, 294 F.3d 71, 77 (D.C. Cir. 2002) (holding mixed-function agency like the IRS is “subject to an exacting standard when it comes to the threshold requirement of Exemption 7”). The statutory language mandates that the records be “compiled” for law enforcement purposes, not merely that they “contain” information that supposedly serves a law enforcement purpose. But even assuming the content of the records establishes whether they were compiled for law enforcement purposes, SED failed to establish that the records at issue do, in fact, serve a law enforcement purpose. SED’s assertion that the purpose of the fiscal audits “is to uncover fraud and abuse” (SED Br. at 27), is unsupported by the Record, which establishes that the purpose of the audits is “to verify the costs and expenses incurred to render [preschool special education] services.” (R. 102 ¶ 8; see also R. 105 ¶ 16 (“Financial audits verify that costs are 3 properly reported and that improper costs are not reimbursed.”); accord SED Br. at 7 (quoting R. 105 ¶ 16).) Notably, while Education Law § 4410-c(2)(d) directs the Comptroller to refer “any findings of fraud, abuse or other conduct constituting a crime” to an appropriate agency, there is no similar directive to municipalities in Education Law § 4410. And while the Comptroller has made such referrals in the past, (R. 103 ¶ 10), there is no evidence that any municipality has done so. All of the “law enforcement purposes” allegedly served by “fiscal audits” are incidental and admittedly at least one step removed from the fiscal audits themselves. (SED Br. at 28.) SED baldly claims that the audits could theoretically lead to criminal or civil investigations conducted by other agencies or an investigation by SED of accountants for professional misconduct, and may act as a deterrent. (Br. at 27-31.) Perhaps, but the same could be said for much of what agencies do. Agencies perform many routine tasks with “law enforcement purposes in mind,” (R. 137 (emphasis added)), but POL § 87(2)(e) requires something more. Neither SED nor municipalities were acting in a law enforcement capacity when the records were compiled, nor were they compiled in connection with any law enforcement investigation or proceeding. SED’s contention that federal case law supports its position (SED Br. at 32- 37), is contradicted by the very case law on which it relies. When a federal agency withholds records on the grounds that disclosure would interfere with “an ongoing 4 law enforcement ‘investigation[,]’” 5 U.S.C. § 552(b)(7)(A), the agency must establish that the records were compiled in connection with a specific investigation. See Tax Analysts, 294 F.3d at 77. Where, however, the agency “seeks to avoid disclosure of internal agency material relating to guidelines, techniques, and procedures for law enforcement investigations and prosecutions,” the agency need not establish that such materials were compiled in the course of a specific investigation. Id. at 79. As discussed by the court in Tax Analysts, FOIA was amended in 1986 to broaden the scope of Exemption 7 to permit the withholding of such materials, “even when the materials have not been compiled in the course of a specific investigation.” Id. at 80. Here, SED withheld the records based on POL § 87(2)(e)(i), the State analogue of Exemption 7(A). Following federal law, SED must establish that the records at issue were compiled in the course of a specific investigation, which it cannot do. While SED has belatedly invoked POL § 87(2)(e)(iv), the Record establishes that the audit procedures at issue do not constitute non-routine “criminal investigative techniques and procedures.” (See Opening Br. at 25-28; see also Part III, infra.) Moreover, SED’s reliance on post-1986 federal cases is erroneous, as New York did not amend FOIL after the changes to FOIA in 1986, and further because the federal exemption for techniques and procedures is much 5 broader than POL § 87(2)(e)(iv), and not limited to “criminal” investigative techniques or procedures. See generally 5 U.S.C. § 552(b)(7)(E). II. DISCLOSURE OF THE RECORDS WOULD NOT “INTERFERE WITH LAW ENFORCEMENT INVESTIGATIONS.” This Court should reject SED’s request to expand the holding in Matter of Fink to create a new exemption, not found in FOIL, that would except from disclosure audit procedures that are not exempt under POL § 87(2)(e)(iv). The Legislature limited the scope of subpart (iv) to “criminal investigative techniques and procedures,” thus intentionally excluding techniques and procedures used outside of a criminal investigation. Subpart (i) should not be used as a bootstrap for withholding techniques and procedures that are not exempt under subpart (iv). Where, as here, an agency seeks to withhold techniques and procedures, they should be required to establish that they fall squarely within POL § 87(2)(e)(iv). There may be circumstances, like those in Matter of Fink, where non-routine criminal investigative techniques and procedures may be exempt under both subparts (i) and (iv) of POL § 87(2)(e). While “the Court’s reasoning” (SED Br. at 40) in Matter of Fink could lend support to such a position in certain cases, this is not such a case for at least two reasons. First, the audit procedures at issue are not non-routine “criminal investigative techniques or procedures” within the meaning of POL § 87(2)(e)(iv). (See Opening Br. at 25-28; see also Part III, infra.) Second, 6 the routine fiscal audits performed by municipalities are not “law enforcement investigations” within the meaning of POL § 87(2)(e)(i). (Opening Br. at 22-25.) SED takes the extraordinary position that all fiscal audits are “investigations” within the meaning of the law enforcement exemption. (SED Br. at 41-42.) Not surprisingly, SED cites no case law or other authority to support this overly broad interpretation of the statutory exemption. SED disregards the context of the term “investigation” when it relies on the Black’s Law Dictionary definition of that term. (SED Br. at 41.) The exemption uses the term “law enforcement investigations,” POL § 87(2)(e)(iv) (emphasis added), thus contemplating an investigation performed by a law enforcement agency that could lead to some type of enforcement action. The fiscal audits at issue here are plainly not “law enforcement investigations” within the meaning of the statute, and SED’s interpretation of the statute is inconsistent with this Court’s holdings that reject “blanket exemptions for particular types of documents.” See, e.g., Matter of Gould v. N.Y. City Police Dep’t, 89 N.Y.2d 267, 275 (1996). SED finally concedes that an agency resisting disclosure pursuant to POL § 87(2)(e)(i) must establish the existence of a specific, ongoing or threatened investigation or judicial proceeding. (SED Br. at 43.) In attempting to establish the existence of ongoing fiscal audits, SED does not rely on anything in the Record, and instead baldly asserts that “several municipal audits are currently 7 underway[.]” (Id. at 43.) This Court should reject SED’s belated and unsupported attempt to meet it “burden under Public Officers Law § 89(4)(b) to articulate a factual basis for the exemption.” Matter of Lesher v. Hynes, 19 N.Y.3d 57, 67 (2012). But even accepting as true the existence of a few ongoing municipal audits, the Audit Plan at issue was created by Onondaga County, not the counties referenced by SED. (R. 74-80.) SED’s bald assertion that “the Comptroller has 29 audits ongoing at present” is similarly dehors the Record, unsupported, and inappropriate. (SED Br. at 44.) It is also irrelevant, as even SED does not claim that release of the records at issue here can in any way interfere with the Comptroller’s audits. And while it is true that a decision here “may have implications” for the Comptroller’s assertion of the law enforcement exemption in connection the audits required under Education Law § 4410-c(1) (SED Br. at 25), that is not a reason to expand the scope of any FOIL exemptions beyond the plain meaning of the statute. III. THE RECORDS DO NOT CONTAIN NON-ROUTINE “CRIMINAL INVESTIGATIVE TECHNIQUES OR PROCEDURES.” A. SED Waived Its Right to Rely on POL § 87(2)(e)(iv) by Failing to Assert It in the Administrative Proceeding or in the Trial Court. SED does not dispute that it failed to invoke POL § 87(2)(e)(iv) until briefing in the Third Department. SED nonetheless urges that this Court should find that there was no waiver because “the rationales for the application of subparts 8 (i) and (iv) overlap,” and thus SED “sufficiently preserved” its right to invoke a new exemption on appeal. (SED Br. at 45.) SED cites to no case law or other authority in support of this novel proposition. Indeed, there is none. A fundamental principle of administrative law long accepted by this court limits judicial review of an administrative determination solely to the grounds invoked by the agency, and if those grounds are insufficient or improper, the court is powerless to sanction the determination by substituting what it deems a more appropriate or proper basis. Trump-Equitable Fifth Ave. Co. v. Gliedman, 57 N.Y.2d 588, 593 (1982). Accordingly, “judicial review of an administrative determination is limited to the grounds invoked by the agency[.]” Matter of MacKenzie v. Seiden, 106 A.D.3d 1140, 1142 n.1 (3d Dep’t 2013). Moreover, this Court has held that, “[w]hen faced with a FOIL request, an agency must either disclose the record sought, deny the request and claim a specific exemption to disclosure, or certify that it does not possess the requested document and that it could not be located after a diligent search.” Beechwood Restorative Care Ctr. v. Signor, 5 N.Y.3d 435, 440-41 (2005) (emphasis added). It would be fundamentally unfair to allow agencies to raise new FOIL exemptions after the administrative process is complete, and even more so after judgment is issued in the trial court. This Court should hold that SED waived a defense based on POL § 87(2)(e)(iv). 9 B. The Redacted Information Constitutes Routine Fiscal Audit Procedures, Not Criminal Investigative Techniques. Even if SED “sufficiently preserved” a defense based on POL § 87(2)(e)(iv), the audit procedures at issue plainly do not constitute non-routine “criminal investigative techniques or procedures.” The Record establishes that the fiscal audits are not conducted by criminal investigators or prosecutors, nor are they conducted as part of a criminal investigation. (R. 91-92, 102 ¶ 8, 105 ¶ 16.) As an initial matter, SED is mistaken when it claims that Ms. Madeiros “does not dispute” that the Audit Plans at issue contain non-routine techniques. (SED Br. at 45.) SED has the burden of establishing that the techniques are not routine, and SED’s single affiant does not even address the issue. (See generally R. 101-110.) As Ms. Madeiros does not have access to certain of the redacted records (R. 65-80), Ms. Madeiros cannot address the issue with respect to those documents. However, New York City posts on its website its Audit Plan,2 and even a cursory review of that document establishes that the procedures therein are “merely a recitation of the obvious” and “routine technique[s] that would be used in any audit[.]” Matter of Fink, 47 N.Y.2d at 573. Nor has SED established that the Audit Plans include “criminal investigative techniques or procedures” as required under POL § 87(2)(e)(iv) 2 The Audit Program of the New York City Department of Education may be accessed at: http://schools.nyc.gov/oag/4410/4410AuditPgm.pdf. Unlike SED, the City Department of Education understands that giving providers access to its Audit Plan will facilitate their compliance with applicable guidelines. 10 (emphasis added). SED admittedly urges a significantly broader definition of the term “criminal” than that used by the lower courts, arguing that neither the “context” in which the techniques were developed nor the lack of “prosecutorial powers” of the agency that developed them should matter. (SED Br. at 47.) Instead, argues SED, the “function” of an investigative technique should determine whether it is “criminal.” (Id.) SED’s nebulous and overly broad construction of the statute would render the term “criminal” in subpart (iv) meaningless and allow a blanket exemption for all audit procedures used by any agency or independent auditor for any purpose.3 But even if the audit procedures at issue here were analyzed in terms of their function, the Record establishes that the Audit Plans were designed “to ‘verify that costs are properly reported and that improper costs are not reimbursed[,]’” (SED Br. at 7 (citing R. 105)), not to uncover evidence for use by other agencies in subsequent criminal investigations or proceedings. SED’s naked assertion to the contrary (SED Br. at 46), is unsupported and contradicted by the Record. But even if the use of any audit procedures resulted in evidence that could be used by another agency in a later criminal investigation or proceeding, that does not 3 Notably, SED understood the plain meaning of the term “criminal” in objecting to certain amendments to FOIL in 1977. See Letter from Robert D. Stone (SED), dated August 2, 1977 at 2, Bill Jacket, L. 1977, ch. 933 (“We receive, for example, complaints of immoral or illegal or unprofessional conduct by teachers and professional licensees. The same degree of confidentiality should be accorded to such complainants and to investigative techniques and procedures used in such proceedings as is present in criminal proceedings.”) (emphasis added). 11 somehow transform the audit procedures into “criminal investigative techniques” as that term is used in POL § 87(2)(e)(iv). The audit procedures set forth in the Audit Plans are routine fiscal audit techniques, and therefore POL § 87(2)(e)(iv) has no application here. IV. MS. MADEIROS SUBSTANTIALLY PREVAILED AND SHOULD BE AWARDED REASONABLE ATTORNEYS’ FEES. This Court should hold that a FOIL requester “substantially prevails” where, as here, a State agency issues a blanket denial without any reasonable basis, disregards an administrative appeal, and produces responsive records only after suit is brought. Any other rule encourages State agencies, if they are so inclined as is SED, to flout their obligations under FOIL until such time as suit is brought. “Clearly, that is not the way things are supposed to work under the statute.” N.Y. Civil Liberties Union v. Erie Cty. Sheriff’s Office, 47 Misc. 3d 1201(A), 15 N.Y.S.3d 713, 2015 WL 1295966, at *14 (Sup. Ct., Erie Cty. Mar. 17, 2015) (awarding attorneys’ fees where respondent issued blanket denial, ignored administrative appeal, and only produced records after suit was brought). SED’s contention that Ms. Madeiros did not substantially prevail because the courts below upheld most of SED’s redactions (Opp. Br. 50), ignores the fact that Ms. Madeiros did not bring this suit to challenge SED’s redactions. Ms. Madeiros was forced to either walk away empty-handed from her FOIL request or bring suit because SED issued an unreasonable blanket denial and ignored her 12 timely appeal. SED is unable to distinguish this case from the many others that hold a party substantially prevails if “the net result of the litigation was that respondent produced all or virtually all of the requested documents.” (SED Br. at 49 (citing cases).) It is undisputed that, as a result of this litigation, SED produced all the documents requested. (R. 106, ¶¶ 19, 20.) SED does not even attempt to justify its pre-litigation conduct, focusing instead on its untimely assertion of “an exemption” and the redactions. (SED Br. at 50-51.) SED fails to acknowledge that it issued an impermissible blanket denial, had no reasonable basis for withholding all 55 pages of responsive documents in their entirety, including SED’s publicly-available fiscal audit guidelines and standards, and ignored Ms. Madeiros’s appeal. SED’s misconduct is nothing like that at issue in the few cases relied on by SED. (SED Br. at 51.) The Record is devoid of any evidence that SED’s FOIL violations were the result of “good faith.” Matter of Friedland v. Maloney, 148 A.D.2d 814, 816 (3d Dep’t 1989). Under the circumstances of this case, this Court should hold that Ms. Madeiros “substantially prevailed” in this proceeding and is entitled to reasonable attorneys’ fees as a matter of law, and remand the matter to the trial court for an award of reasonable attorneys’ fees and costs pursuant to POL § 89(4)(c). CONCLUSION For the foregoing reasons, Petitioner-Appellant Pamela A. Madeiros respectfully requests that this Court reverse the Appellate Division's Memorandum and Order, modify the Judgment insofar as it denied the Petition, remand for a determination and award of reasonable attorneys' fees and costs, and grant such further and other relief as the Court deems appropriate. Dated: Albany, New York October 20, 2016 ALB 1961223v3 Respectfully Submitted, hia E. Neidl State Street, 6th FlooR Albany, New York 12207 (518) 689-1400 (518) 689-1499 neidlc@gtlaw.com Attorneys for Petitioner-Appellant Pamela A. Madeiras 13