REVISED REQUEST FOR DECLARATORY RULING CONCERNING THE APPLICABILITY OF THE NYS CONSTITUTION AND THE STATE ADMINISTRATIVE PROCEDURE ACT TO THE ATTORNEY CERTIFICATION PROGRAM ADOPTED BY THE NYS LIQUOR AUTHORITY
The undersigned petitioner respectfully requests a Declaratory Ruling from the Members of the NYS Liquor Authority pursuant to state Administrative Procedure Act:
§ 204. Declaratory rulings by agencies. 1. On petition of any person, an agency may issue a declaratory ruling with respect to […] (ii) whether any action by it should be taken pursuant to a rule.
1. The question(s) raised below concern an “action” by the Members of the New York State Liquor Authority in August 2009: adoption of a resolution authorizing what has commonly known as “Attorney Certification Program.” A 2nd resolution adopted in 2010 continued the program indefinitely.
2. As described by the Authority in 2009 and again in 2010, the program stated goal was to decrease retail licensing processing times for all applicants by having examiners forego reviews of portions of applications certified by attorneys and their clients to be complete and accurate. Ironically, processing times are longer now than in 2009.
3. According to statements made by the Deputy Commissioner at the time, certified applications are sometimes “audited” later to spot check whether the applicant and attorney answered the certifications truthfully.
4. The Authority maintains a list of attorneys who are not permitted to certify applications based on previous omissions, misrepresentations or errors.
5. Non-attorney consultants, including the petitioner, are not permitted to certify applications. Unrepresented applicants are also not permitted to self-certify.
6. There are no published guidance documents concerning the program beyond a 3-page certification form that contains two pages of questions about the application followed by a one-page attestation page.
7. Applications accepted into the program qualify for an expedited review. They move through the Licensing Bureau on a different track than applications that are not certified by an attorneys. The fairness of this two-track system is not a subject of this request.
8. Prior to implementing the program, and subsequently, the Authority never filed the notice of proposed rulemaking; never sought public comment; never published the proposed rule in the State Register.
9. Evidence of the representations made above are contained through documents received by the petitioner from the Authority through a FOIL request. They follow my signature line.
DISCUSSION OF THE NYS CONSTITUTION AND THE STATE ADMINISTRATIVE PROCEDURE ACT AND THE RULEMAKING REQUIREMENTS AND PROCEDURES
1. Since 1938, the New York State Constitution has required that state agencies file rules and regulation with the Department of State. This requirement is found in Article IV, Section 8. The text of this requirement is as follows:
[Departmental rules and regulations; filing; publication] §8. No rule or regulation made by any state department, board, bureau, officer, authority or commission, except such as relates to the organization or internal management of a state department, board, bureau, authority or commission shall be effective until it is filed in the office of the department of state.
2. To implement the will of the people as expressed in the Constitutional amendments of 1938, state lawmakers established rulemaking requirements procedures within the state Administrative Procedure Act:
§ 202. Rule making procedure. 1. Notice of proposed rule making. (a) Prior to the adoption of a rule, an agency shall submit a notice of proposed ruling making to the secretary of state for publication in the state register and shall afford the public an opportunity to submit comments on the proposed rule.
3. SAPA further provides a definition of what constitutes “a rule”:
§201. sub 2. (a) “Rule” means (i) the whole or part of each agency statement, regulation or code of general applicability that implements or applies law ..”
4. SAPA goes on to implement the Constitutional exemption for “internal management” practices from the rule:
§201. sub 2. (b) Not included within paragraph (a) of this subdivision are:
(i) rules concerning the internal management of the agency which do not directly and significantly affect the rights of or procedures or practices available to the public;
DISCUSSION OF RELEVANT CASE LAW CONCERNING ARTICLE IV §8 OF THE STATE CONSTITUTION AND §§ 201 AND 202 OF STATE ADMINISTRATIVE PROCEDURE ACT
83 N.Y.2d 296 (1994)
632 N.E.2d 434
610 N.Y.S.2d 125
In the Matter of Patricia Schwartfigure, Appellant,
v.
Thomas F. Hartnett, as Commissioner of the New York State Department of Labor, Respondent.
Court of Appeals of the State of New York.
Argued February 16, 1994.
Decided March 22, 1994.
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This case concerned a state Labor Department “policy” concerning fees. The Court of Appeals concluded that the “policy” amounted to a “rule” that directly affected the public subject to the laws the Labor Department implemented.
From the Justices’ opinion:
“Respondent’s 50% set-off policy for nonwillful overpayments is a rigid, numerical policy invariably applied across-the-board to all claimants without regard to individualized circumstances or mitigating factors, and as such falls plainly within the definition of a “rule” for State Administrative Procedure Act purposes. The policy cannot be characterized as concerning only the internal management of the agency (see, State Administrative Procedure Act § 102 [2] [b] [i]), as the recoupment undertaken thereby directly and significantly affects that segment of the public over which respondent exercises direct authority … We therefore conclude that the policy, in its present form and manner of application, is subject to the rule-making procedures set forth in the State Administrative Procedure Act (see, § 202).”
PETITIONER’S CONCLUSIONS: A program that affects when and how certain applications are processed and approved cannot deemed to be characterized as concerning only the internal management of the agency. The program has far-reaching implications. When an examiner with 50 files on her desk reviews a certified application filed on July 1 and bypasses a non-certified application filed on June 1 to do so, that affects the public in a very significant away. That is not an “internal management” issue.
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10 N.Y.2d 123 (1961)
The People of the State of New York, Appellant,
v.
Frederick John Cull, Respondent.
Court of Appeals of the State of New York.
Argued June 1, 1961.
Decided July 7, 1961.
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This case involved a VTL prosecution for violating a speeding restriction by the State Traffic Commission that was cast as an “order.”
The conviction was reversed by a county court on a ground raised by the defendant: That the commission’s order imposing the speed limitation had not been filed with the Department of State as required by Article IV, Section 8 of the Constitution. The People appealed. For the purposes of the instant Declaratory Ruling, the relevant opinion of the Court of Appeals ultimately upholding the reversal of the conviction was that the “order” in question was a “rule or regulation” for the purposes of the Constitution and SAPA rulemaking requirement.
The Justices wrote:
“The term, ‘rule or regulation,’ has not, it is true, been the subject of precise definition, but there can be little doubt that, as employed in the constitutional provision, it embraces any kind of legislative or quasi-legislative norm or prescription which establishes a pattern or course of conduct for the future. [Emphasis added]. The label or name employed is not important and, unquestionably, many so-called ‘orders’ come within the term …The spirit and design of the constitutional provision are best effectuated by requiring the administrator, if he wishes the rules and regulations of his agency or department to be effective, to file them no matter what label is assigned to them.”
CONCLUSION OF PETITIONER: The Authority is free to use whatever label it likes for the “Attorney Certification” scheme. “Program,” “order,” “policy” – it does not matter. An agency practice that rewards applicants with quicker and less-stringent reviews because a non-governmental attorney signs off on them constitutes a rule and is subject to the rulemaking requirement and procedures provided for in the Constitution and SAPA.
QUESTIONS FOR THE MEMBERS TO DECIDE
Based on the foregoing recitation of facts, the documents returned to petitioner via FOIL that follow, and the discussion of case law and the rulemaking requirements and procedures contained in Article IV, Section 8 of the state Constitution and Sections 201 and 202 of the state Administrative Procedure Act, the petitioner hereby requests that the Members of the NYS Liquor Authority issue a Declaratory Ruling on the following questions pursuant to SAPA Section 204 sub. 1 (iii).
1. Does a program, policy or practice whereby shorter processing times are granted to retail applicants certified to be complete and accurate by applicants and their attorneys than to other applicants constitute a “rule” subject to the formal rulemaking requirements and procedures of Article IV, Section 8 of the state constitution and article 202 of the state Administrative Procedure Act?
2. Absent a rule adopted pursuant to Section 202 of the state Administrative Procedure Act, by what statutory authority, implied or explicit, does the New York State Liquor Authority conduct only partial reviews of “attorney certified” retail license applications while subject others to full reviews?
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Thank you in advance to your time and attention.
Respectfully submitted,
John Springer
Petitioner