text:
    Capital Telephone Company, Inc., et al., Respondents, v Pattersonville Telephone Company, Inc., et al., Appellants.
    Argued March 23, 1982;
    decided May 13, 1982

      POINTS OF COUNSEL

      James B. Ayers for appellants.
    I. This action is barred by the doctrine of collateral estoppel despite the dismissal of plaintiffs’ prior complaint by the Public Service Commission without a full evidentiary hearing. (United States v Utah Constr. Co., 384 US 394; Matter of Evans v Monaghan, 306 NY 312; Osterhoudt v Rigney, 98 NY 222; People ex rel. McCabe v Matthies, 179 NY 242; Matter of New York Tel. Co. v Public Serv. Comm, of State of N. Y., 56 AD2d 415; Matter of Tri-City Tel. Co. v Kahn, 49 AD2d 126, 38 NY2d 708.) II. This action is also barred by the doctrine of primary jurisdiction. (Far East Conference v United States, 342 US 570; Hewitt v New York, New Haven & Hartford R.R. Co., 284 NY 117; Van Dussen-Storto Motor Inn v Rochester Tel. Corp., 42 AD2d 400, 34 NY2d,904; State of New York v New York Movers Tariff Bur., 48 Misc 2d 225; United States Nav. Co. v Cunard S. S. Co., 284 US 474; Keogh v Chicago & Northwestern Ry., 260 US 156; Barasch v Micucci, 49 NY2d 594.) III. The Public Service Commission has exclusive original jurisdiction over public utility rates. (Van Dussen-Storto Motor Inn v Rochester Tel. Corp., 42 AD2d 400, 34 NY2d 904; People ex rel. Public Serv. Comm, of State of N. Y. v New York Tel. Co., 262 App Div 440, 287 NY 803.) IV. Plaintiffs have failed to join New York Telephone and the PSC as necessary parties to this action.

      Keith J. Roland for respondents.
    I. This antitrust action is not barred by the doctrine of collateral estoppel. (Cantor v Detroit Edison Co., 428 US 579; United States v American Tel. & Tel. Co., 427 F Supp 57, 429 US 1071, 434 US 966; California v Federal Power Comm., 369 US 482; Otter Tail

      Power Co. v United States, 410 US 366; United States v Philadelphia Nat. Bank, 374 US 321; Silver v New York Stock Exch., 373 US 341; United States v R.C.A., 358 US 334; Georgia v Pennsylvania R. R. Co., 324 US 439; Essential Communications Systems v American Tel. & Tel. Co., 610 F2d 1114; Interconnect Planning Corp. v American Tel. & Tel. Co., 465 F Supp 811.) II. The Supreme Court possesses sufficient competence to review the issues in this case. III. The PSC does not have exclusive original jurisdiction over the issues in this case. (Van Dussen-Storto Motor Inn v Rochester Tel. Co., 42 AD2d 400, 34 NY2d 904; People ex rel. Public Serv. Comm, of State of N. Y. v New York Tel. Co., 262 App Div 440, 287 NY 803; Columbia Gas of N. Y. v New York State Elec. & Gas Corp., 28 NY2d 117; Matter of Tele/Resources v Public Serv. Comm, of State of N. Y., 58 AD2d 406.) IV. Neither the PSC nor New York Telephone Company is a necessary party to this action. (Blue Grass Partners v Bruns, Nordeman, Rea & Co., 75 AD2d 791.) V. Federal antitrust precedent should be followed by this court. (Manhattan Stor. & Warehouse Co. v Movers & Warehousemen’s Assn. of Greater N. Y., 262 App Div 332, 289 NY 82; Hsing Chow v Union Cent. Life Ins. Co., 457 F Supp 1303.)

      Robert Abrams, Attorney-General (Robert T. Perry, Shirley Adelson Siegel and Lloyd Constantine of counsel), amicus curiae.

    I. PSC dismissal of a. complaint alleging improper anticompetitive activity, without a thorough investigation or some hearing affording the complainant a fair opportunity to demonstrate his claim, does not bar, under the doctrine of collateral estoppel, an action under the Donnelly Act alleging similar improper anticompetitive activity. (United States v Utah Constr. Co., 384 US 394; Matter of Evans v Monaghan, 306 NY 312; Matter of Venes v Community School Bd. ofDist. 26, 43 NY2d 520; Hewitt v New York, New Haven & Hartford R. R. Co., 284 NY 117; Matter of Tele/Resources v Public Serv. Comm, of State of N. Y., 58 AD2d 406, 43 NY2d 647; Matter of Westchester Mobilfone System v Public Serv. Comm, of State of N. Y., 72 AD2d 895; State of New York v McBride Transp., 56 Misc 2d 90; Tipler v Du Pont de Nemours & Co., 443 F2d 125; Lane Constr. Corp. v Winona Constr. Co., 49 AD2d 142; Sierra Club v Alexander, 484 F Supp 455, 633 F2d 206.) II. A court in an action under the Donnelly Act should not invoke the doctrine of primary jurisdiction and refer the entire action to the PSC before the issues have been crystallized through pretrial discovery. (United States v Western Pacific R. R. Co., 352 US 59; Nader v Allegheny Airlines, 426 US 290; Carnation Co. v Pacific Conference, 383 US 213; United States v American Tel. & Tel. Co., 427 F Supp 57, 461 F Supp 1314; Litton Systems v American Tel. & Tel. Co., 487 F Supp 942; Far East Conference v United States, 342 US 570; United States Nav. Co. v Cunard S. S. Co., 284 US 474; State of New York v New York Movers Tariff Bur., 48 Misc 2d 225; Hewitt v New York, New Haven & Hartford R. R. Co., 284 NY 117.) III. The PSC does not have exclusive original jurisdiction in an action under the Donnelly Act where plaintiffs have alleged that a competitor’s rates in tariffs filed with the PSC are predatory. (Van Dussen-Storto Motor Inn v Rochester Tel. Corp., 42 AD2d 400, 34 NY2d 904; People ex rel. Public Serv. Comm, of State of N. Y. v New York Tel. Co., 262 App Div 440, 287 NY 803; Purcell v New York Cent. R. R. Co., 268 NY 164; Matter of Leitner v New York Tel. Co., 277 NY 180; Murray v New York Tel. Co., 170 App Div 17, 226 NY 590; Central Hudson Gas & Elec. Corp. v Napoletano, 277 App Div 441; Keogh v Chicago & Northwestern Ry., 260 US 156; Essential Communications Systems v American Tel. & Tel. Co., 610 F2d 1114.)
   OPINION OF THE COURT

Meyer, J.

Plaintiffs’ complaint in this action brought under the provisions of the Donnelly Act (General Business Law, §§ 340-347) alleging violation by defendants and New York Telephone Company (NYT) of the antitrust proscriptions of that act is not precluded by the Public Service Commission’s prior dismissal of plaintiffs’ complaint to that body pursuant to section 91 of the Public Service Law alleging discriminatory activity by the New York Telephone Company. There having been no hearing before the commission (PSC) and the issues to be determined in the Donnelly Act action being neither identical with the issues under section 91 nor necessarily determined in the prior proceeding before the PSC, the essentials for issue preclusion are not present. The jurisdiction of the PSC to accept tariffs for filing and entertain customer complaints of discrimination does not give it exclusive jurisdiction of a competitor’s antitrust action, nor in view of the prior PSC ruling is there present reason for abstention by the court under the doctrine of primary jurisdiction. The order of the Appellate Division modifying Special Term’s dismissal of plaintiffs’ complaint by denying defendants’ motion for summary judgment except as to plaintiffs’ Federal antitrust claims should, therefore, be affirmed, with costs, and the certified question answered in the affirmative.

Capital Telephone Company (Capital) is a radio common carrier which provides one-way paging and two-way mobile radio service. Peter A. Bakal is president of Capital but also provides through his own solely owned company similar regulated common carrier service. Pattersonville Telephone Company (Pattersonville) competes with Capital and Bakal in offering one-way paging and two-way mobile radio service but also operates a regular landline telephone service. By letter dated May 26, 1978, Capital and Bakal complained to the PSC that the New York Telephone Company had refused them services which NYT was providing to Pattersonville without charge and denying to them a revenue sharing arrangement which was afforded to Pattersonville. Capital and Bakal therefore asked for an order requiring that they and Pattersonville be treated equally by NYT.

After receiving a written report from its communications division stating that NYT in 1976 had terminated the revenue sharing arrangement, differentiating between Capital and Bakal, as radio telephone utilities, and Pattersonville, as a radio and landline telephone service, and stating that NYT’s charges to Capital and Bakal were at the same rate charged by NYT to competing radio carriers and not discriminatory, the PSC declined to issue the requested order.

While the PSC complaint was pending, Capital and Bakal began this action against Pattersonville and Robert A. Dowling, its president. In three causes of action it alleges conspiracy of defendants and NYT relating to division of revenues and the provision of facilities denying to plaintiffs equal treatment and their rights under State and Federal law, violation of section 340 of the General Business Law, and as a result the submission and charging by Pattersonville of below cost tariff rates in violation of State and Federal antitrust law. On defendants’ motion for summary judgment, Special Term granted the motion and dismissed the entire complaint, concluding as to plaintiffs’ Federal claims that the court lacked subject matter jurisdiction and as to the other claims that plaintiffs were barred by the prior PSC determination, of which they should have sought review in an article 78 proceeding. The Appellate Division, two Justices dissenting, modified by denying the motion except as to the Federal claims and granted leave to appeal on a certified question.

Before this court defendants argue that (1) the PSC determination bars the entire action on principles of collateral estoppel, (2) the complaint challenges the propriety of tariffs as to which the PSC has exclusive original jurisdiction, (3) the technical nature of the issues requires abstention by the courts under the doctrine of primary jurisdiction, and (4) the PSC and NYT are necessary parties to the action.

I

Collateral estoppel (or issue preclusion as is its more modern name, see Matter of American Ins. Co. [Messinger— Aetna Cas. & Sur. Co.], 43 NY2d 184, 189, n 2) applies to administrative as well as judicial proceedings (Bernstein v Birch Wathen School, 51 NY2d 932; Matter of Evans v Monaghan, 306 NY 312, 323-324; United States v Utah Constr. Co., 384 US 394, 422; Tipler v Du Pont de Nemours & Co., 443 F2d 125, 128; see Restatement, Judgments 2d [Tent Draft No. 7], § 131). Required for application of the doctrine in either type proceeding are that the issue as to which preclusion is sought be identical with the issue decided in the prior proceeding, that the issue have been necessarily decided in the prior proceeding, and that the litigant who will be held precluded in the present proceeding have had a full and fair opportunity to litigate the issue in the prior proceeding (Gilberg v Barbieri, 53 NY2d 285, 291; Schwartz v Public Administrator of County of Bronx, 24 NY2d 65, 71; see B. R. De Witt, Inc. v Hall, 19 NY2d 141). The burden of establishing the first two elements rests upon the proponent of preclusion, but as to the lack of a full and fair opportunity to contest, the burden is on the opponent (Schwartz v Public Administrator of County of Bronx, 24 NY2d 65, 73, supra; B. R. De Witt, Inc. v Hall, 19 NY2d 141, 148, supra).

A

The fact that the charges made by NYT and Patterson-ville are based upon tariffs filed by those public utilities does not protect the utilities or others acting in combination with them from antitrust liability (Columbia Gas of N. Y. v New York State Elec. & Gas Corp., 28 NY2d 117; Cantor v Detroit Edison Co., 428 US 579, 596; Northeastern Tel. Co. v American Tel. & Tel. Co., 651 F2d 76, 82, cert den 455 US_, 50 USLW 3650). But defendants, emphasizing that plaintiffs complained to the PSC about the “illegal, preferential and anticompetitive conduct” of NYT in charging them for services provided to Pattersonville without charge, argue that both proceedings involve anticompetitive conduct and that, therefore, the PSC in considering plaintiffs’ complaint determined the identical issue involved in this action. Whether the issues in the two proceedings are identical depends, however, not upon how one or all of the parties characterize them, but on what facts are determinative of each proceeding in light of the substantive law principles, common law or statutory, governing each.

The question before the PSC was whether under section 91 of the Public Service Law the charge made by NYT to plaintiffs was an “unjust or unreasonable charge” (subd 1), “greater or less compensation for any service rendered” than that charged or received from any other person for “a like and contemporaneous service” (subd 2) or gave “any undue or unreasonable preference or advantage to any person, corporation or locality” (subd 3). The question to be decided by the court in this Donnelly Act action is whether “[cjompetition or the free exercise of any activity * * * in the furnishing of any service * * * is or may be restrained” or “the furnishing of any service in this state is or may be restrained” for the purpose of “establishing or maintaining [a] monopoly or unlawfully interfering with the free exercise of any activity” (General Business Law, § 340, subd 1).

The distinction between the issues under the two statutes is placed in perspective by reference to State of New York v Mobil Oil Corp. (38 NY2d 460). We there held that price discrimination per se was outside the scope of the Donnelly Act and dismissed a Donnelly Act complaint which contained “no allegation of any agreement or commitment on the part of either the oil company or of its dealers or any of them” (38 NY2d, at p 464) but only a “unilateral practice” (id., at p 466, n 4). The issue before the PSC on the present plaintiffs’ complaint was whether there was discrimination between Pattersonville and plaintiffs as to the revenues, settlements, services and facilities provided by NYT; whether it came about by agreement had no bearing. The complaint before us alleges an agreement between Pattersonville and NYT relating to revenues, settlements, services and facilities for the purpose of denying plaintiffs their rights under State law and, by permitting Pattersonville to charge lower, rates than plaintiffs, of interfering with plaintiffs’ business activities in violation of the Donnelly Act. In the trial of the instant action the fact that the PSC found NYT’s activity “not illegal as a matter of law” will not constitute a defense because discrimination which may be justifiable under section 91 of the Public Service Law “may still be unlawful if it can be shown to have actually restrained competition” (Columbia Gas of N.Y. v New York State Elec. & Gas Corp., 28 NY2d 117, 128, supra; see Van Dussen-Storto Motor Inn v Rochester Tel. Corp., 63 AD2d 244, 251; Tipler v Du Pont de Nemours & Co., 443 F2d 125,128-130, supra; 2 Davis, Administrative Law, § 18.04).

Thus, the issues overlap but are not identical, for in each there is an element not present in the other.

B

Nor can it be said that the issue was “necessarily decided” in the prior proceeding. First, it is not the function of the PSC to enforce State antitrust laws (Matter of Tele/Re sources v Public Serv. Comm. of State of N. Y., 58 AD2d 406, 411, mot for Iv to app den 43 NY2d 647; Matter of Westchester Mobilfone System v Public Serv. Comm, of State of N. Y., 72 AD2d 895, 896; State of New York v McBride Transp., 56 Misc 2d 90, 97; see Siegel, New York Practice, § 456). Second, plaintiffs’ complaint to the PSC was against New York Telephone and requested that NYT be ordered to treat plaintiffs and Pattersonville equally. It did not concern Pattersonville’s rates, which are involved in the third cause of action of plaintiffs’ complaint. Moreover, although NYT’s activities are involved in all three causes of action and preclusion could be found as to claims based on its activities, a reading of the communications division report on the basis of which the PSC denied the complaint shows that except as to radio tie lines the commission did not find that NYT was not providing without charge to Pattersonville services for which plaintiffs were required to pay NYT, but only that the interconnection between NYT and plaintiffs should not be compared with the NYT-Pattersonville connection and that both NYT and Pattersonville treat plaintiffs the same as each treats its own radio operation. As to the revenue sharing claim, it found that the practice was no longer in effect, having been discontinued in September, 1976. The Donnelly Act limitation period is, however, four years (General Business Law, § 340, subd 5), and this action was begun July 6, 1978. Thus, as to neither services nor revenue sharing has the commission decided that there was not discrimination upon which a Donnelly Act claim can be based. All that it necessarily decided was that the preference admittedly given by NYT to Pattersonville over plaintiffs was not undue or unreasonable within the meaning of the Public Service Law.

C

Finally, the record convincingly demonstrates that plaintiffs did not have a full and fair opportunity to contest the issue before the PSC. The only paper before the PSC was plaintiffs’ letter of complaint. As noted, the complaint was referred to the communications division which so far as appears obtained the information in its report by reviewing commission records and by consultation with a member of the commission’s counsel’s office. The report recommended that the commission find the complaint without merit and attached a proposed letter to plaintiffs advising that the commission had considered the report and adopted its conclusion. So far as appears no evidentiary hearing was held by the division or by the commission nor were plaintiffs offered an opportunity to dispute either the legal advice given to the division by commission counsel or to contest the division report before its adoption by the commission. Such procedure falls far short of the full and fair opportunity to contest upon which collateral estoppel depends (cf. Gilberg v Barbieri, 53 NY2d 285, 293, supra; Schwartz v Public Administrator of County of Bronx, 24 NY2d 65, supra; Nasem v Brown, 595 F2d 801; Restatement, Judgments 2d [Tent Draft No. 7], § 131).

For all of the above reasons, plaintiffs’ Donnelly Act claim is not precluded by the prior PSC determination.

II

The other side of defendants’ contention that antitrust claims were necessarily ruled upon by the PSC is its argument that, because the first and part of the third cause of action challenge the reasonableness of Pattersonville’s tariffs, the matter is one over which the PSC has exclusive original jurisdiction re viewable only in an article 78 proceeding. Were the challenge to the reasonableness of Pattersonville’s tariffs as distinct from the preferential application of NYT’s tariff and were it made by a customer rather than a competitor, there might be merit to the argument (compare Van Dussen-Storto Motor Inn v Rochester Tel. Corp., 42 AD 2d 400, affd on opn below 34 NY2d 904, and People ex rel. Public Serv. Comm, of State of N. Y. v New York Tel. Co., 262 App Div 440, affd 287 NY 803, with Essential Communications Systems v American Tel. & Tel. Co., 610 F2d 1114, 1121). But, as already shown, it is not the function of the PSC to enforce the antitrust laws and the issue for consideration in this lawsuit is whether defendants and NYT have combined to prefer Patterson-ville, thus permitting it to charge lower rates than plaintiffs to the detriment of plaintiffs’ business activities. On that question, Pattersonville’s tariffs are only collaterally involved. Whether they are reasonable in relation to Pattersonville’s costs is not the issue; the question is whether Pattersonville’s costs for NYT’s services have been unlawfully reduced.

III

Defendant’s primary jurisdiction argument is predicated upon the technical nature of the services and rebating practices which must be considered. The doctrine of primary jurisdiction is intended to co-ordinate the relationship between courts and administrative agencies to the end that divergence of opinion between them not render ineffective the statutes with which both are concerned, and to the extent that the matter before the court is within the agency’s specialized field, to make available to the court in reaching its judgment the agency’s views concerning not only the factual and technical issues involved but also the scope and meaning of the statute administered by the agency (Hewitt v New York, New Haven & Hartford R. R. Co., 284 NY 117, 124; Maritime Bd. v Isbrandtsen Co., 356 US 481; United States v Western Pacific R. R. Co., 352 US 59; Far East Conference v United States, 342 US 570; see 3 Davis, Administrative Law, §§ 19.01-19.06; 2 NY Jur 2d, Administrative Law, § 181). Though the agency’s jurisdiction is not exclusive, the court postpones its action until it has received the agency’s views (United States v Philadelphia Nat. Bank, 374 US 321, 353; United States v American Tel. & Tel. Co., 461 F Supp 1314, 1329, n 45; 3 Davis, op. cit., § 19.01). Conceivably, issues may arise in this action beyond those already considered by the PSC in passing on plaintiffs’ complaint to it on which the views of the PSC should be sought. If so, the trial court will, after the issues have been more clearly developed through discovery (see United States v American Tel. & Tel. Co., 427 F Supp 57, 62, mot for lv to file prejudgment petition for cert den 429 US 1071, cert den [DC Cir No. 77-1009], cert den 434 US 966), be free to defer its action until those particular phases of the action have been considered by the PSC. Until such time, however, we agree with the ruling, implicit in the Appellate Division’s modification of Special Term’s dismissal of the complaint, that PSC action other than, that already taken by that body in passing on plaintiffs’ complaint to it is not required by considerations of the primary jurisdiction doctrine (see Nader v Allegheny Airlines, 426 US 290, 304).

IV

Defendants’ answer and motion papers raised the question whether the PSC was a necessary party, but defendants have made no motion based on the nonjoinder of NYT. The latter question is, therefore, not properly before us. Defendants argue without citation of authority that the PSC is a necessary party because a judgment in this action would require a change in the tariff approved by the commission. But to the extent that that may be so, it is simply a necessary concomitant of the rule that regulatory agency approval of tariffs does not immunize a utility from antitrust liability. Moreover, the PSC will have full opportunity to consider any change in tariff rates that may be sought by NYT or Pattersonville as a result of the judgment in this action when application for such a change is made to it.

The order of the Appellate Division should, therefore, be affirmed, with costs, and the question certified should be answered in the affirmative.

Chief Judge Cooke and Judges Jasen, Jones and Wachtler concur; Judges Gabrielli and Fuchsberg taking no part.

Order affirmed, etc.


source: Caselaw Access Project

author:
      Per Curiam.
     Fuchsberg, J.

license: Public Domain

text:
    In the Matter of Robert M. Morgenthau, as District Attorney of New York County, Respondent, and Jack Rosenberg, as Judge of the Criminal Court of the City of New York, Intervenor-Respondent, v Lawrence H. Cooke, as Chief Judge of the Unified Court System of the State of New York, et al., Appellants.
    Argued May 4, 1982;
    decided May 13, 1982

      POINTS OF COUNSEL

      Paul A. Feigenbaum, Michael Colodner and Kenneth Falk for appellants.
    I. The temporary assignments of Judges to the Supreme Court in New York City by the Chief Administrator fully comply with the constitutional and statutory sources of his power and are legal in every respect. (Corkum v Bartlett, 46 NY2d 424; Matter of Mar - then v Evans, 83 AD2d 415; People ex rel. Williams v Dayton, 55 NY 367; McGowan v Mayor of City of N. Y., 53 NY2d 86; Uniformed Firefighters Assn. Local 94, IAFF, AFL-CIO v Beekman, 52 NY2d 463; Matter of Kolb v Holling, 285 NY 104; Schieffelin v Hylan, 236 NY 254; Matter of Severino v Ingraham, 44 NY2d 763; Bankers Trust Co. v Braten, 101 Misc 2d 227.) II. Appellee Morgenthau lacks standing to bring this proceeding. (Matter of Dairylea Coop. v Walkley, 38 NY2d 6; Boryszewski v Brydges, 37 NY2d 361; Matter of Urban League of Rochester, N. Y. v County of Monroe, 49 NY2d 551; Wein v Comptroller of State of N. Y., 46 NY2d 394; National Organization for Women v State Div. of Human Rights, 34 NY2d 416; Matter of Marthen v Evans, 83 AD2d 415; Ford v Clarke, 204 App Div 5; Matter of Abrams v New York City Tr. Auth., 39 NY2d 990; Matter of Lefkowitz v Bartlett, 52 AD2d 657.) plan. (Matter of Burke v Sugarman, 35 NY2d 39; Saxton v Carey, 44 NY2d 545; Boryszewski v Brydges, 37 NY2d 361; Matter of Taylor v Sise, 33 NY2d 357.) II. The new rotation plan is not in accordance with any standard or administrative policy this court has approved, and therefore cannot constitutionally be implemented. (Corkum v Bartlett, 46 NY2d 424; Bankers Trust Co. v Braten, 101 Misc 2d 227; Sylvia Lake Co. v Northern Ore Co., 242 NY 144; Matter of Trounstine v Britt, 212 NY 421; Curtin v Barton, 139 NY 505.)

      Robert M. Morgenthau, District Attorney (Robert M. Pitler and Amyjane Rettew of counsel), respondent pro se.

    I. Petitioner has standing to challenge appellants’ rotation

      Boris Kostelanetz and David F. Axelrod for intervenorrespondent.
    I. The rotation plan is a new administrative policy not adopted in accordance with the constitutional mandate. (Matter of Alro Liqs. v New York State Liq. Auth., 29 AD2d 271, 27 NY2d 984; Matter of Breen v Board of Trustees of N. Y. Fire Dept. Pension Fund, 299 NY 8; Matter of Brooklyn Union Gas Co. v City of New York, 104 Misc 2d 441; Corkum v Bartlett, 46 NY2d 424.) II. The rotation plan represents an unproductive deployment of judicial manpower. (Matter of Alro Liqs. v New York State Liq. Auth., 29 AD2d 271, 27 NY2d 984.)
   OPINION OF THE COURT

Per Curiam.

The question presented on this appeal is whether the Chief Administrator of the Courts has authority to assign Judges and Justices of one court to serve temporarily in another court under article VI (§ 26, subd i) of the Constitution of the State of New York when no standards or administrative policies for such transfers have been established in the manner prescribed by section 28 of the same article. We hold that there is no such authority.

On September 21, 1981 the Chief Judge of the State of New York made public announcement of a new, two-step system, to be instituted beginning in January, 1982, for the temporary assignment of Judges of the New York City Civil and Criminal Courts to the Supreme Court of the counties in that city. While the making of such assignments was not new, the procedure announced by the Chief Judge was. Under the process in effect at the time of the announcement, assignments were made by the Chief Administrator of the Courts (respondent Evans) with the assistance of the Deputy Chief Administrative Judge responsible for courts within the City of New York and, although the assignments to the higher court were temporary in designation, several Judges so assigned had served under the assignments for a number of years. Under the new plan announced by the Chief Judge, the details of which were to be promulgated by the Chief Administrator within a month, all New York City Civil and Criminal Court Judges were to be screened by a select committee (the members of which were named in the announcement) to determine their qualification to sit as Acting Supreme Court Justices, following which, assignment to the higher judicial posts would be made on a rotation basis from the lower court Judges recommended by the committee, thus enabling many more to serve in the 97 Supreme Court positions then being filled by temporary assignment.

In conformity with the foregoing announcement, on October 20, 1981 the Chief Administrator made public the details of the rotation plan including a statement of his intentions to begin making assignments under it with the first term of 1982, to give all Civil and Criminal Court Judges recommended by the screening committee who had served in either court for at least one year an opportunity to serve in Supreme Court for substantially equal periods of time, and annually to rotate approximately 50% of the Judges assigned as Acting Supreme Court Justices.

On January 14,1982 petitioner District Attorney of New York County instituted this proceeding under CPLR article 78 to prohibit implementation of the rotation plan, alleging that because subdivision i of section 26 and subdivision c of section 28 of article VI of the State Constitution require that there be standards and administrative policies relative to temporary assignments established by the Chief Judge after consultation with the Administrative Board (consisting of the Chief Judge and the Presiding Justices of the Appellate Divisions) and approval by the Court of Appeals, and because no such standards and policies had been established, the Chief Administrator was without authority to make any temporary assignments under the plan. By so doing he brought into question for the first time the theretofore unchallenged assumption of authority by the Chief Administrator to make temporary assignments of Judges and Justices. On the same day petitioner moved for a preliminary injunction barring the making of assignments under the plan pending adjudication of the proceeding.

After service of an answer by respondents and a hearing before Supreme Court, New York County, the Justice at Special Term by judgment signed January 25, 1982 dismissed the petition and denied the preliminary injunction. He concluded that the District Attorney was not aggrieved by the plan and had no standing to object to it, but that, in any event, the Chief Judge and the Chief Administrator of the Courts had authority to implement the plan. An application for a preliminary injunction during the pendency of an appeal to the Appellate Division was denied on the same day but an expedited briefing schedule for the appeal was fixed.

On March 30, 1982 the Appellate Division reversed the judgment dismissing the petition, converted the proceeding to a declaratory judgment action, held that the District Attorney had standing to bring the proceeding, and entered judgment declaring that, by reason of failure of compliance with subdivision i of section 26 and subdivision c of section 28 of article VI of the State Constitution, the plan for temporary assignments was void and without effect. The case is before us on appeal taken as of right by respondents.

We address first the standing of the District Attorney to maintain this proceeding now properly converted to an action for declaratory judgment (CPLR 103, subd [c]). Under the liberalized attitude toward recognition of standing to litigate announced in Boryszewski v Brydges (37 NY2d 361), the District Attorney qualifies under the “zone of interest” test (Matter of Dairylea Coop. v Walkley, 38 NY2d 6, 9) as a proper party to initiate this litigation challenging the manner of designation of Judges to the Supreme Court in the City of New York — courts in which he, as the public officer charged with responsibility for prosecution of felony indictments in New York County, must necessarily perform the duties of his office and as to which he has a cognizable interest in assuring that the designation of the judicial officers to preside therein conforms to constitutional mandate.

With respect to the merits of the litigation, the order appealed from should be affirmed with only a procedural modification.

Critical to consideration of the issue and arguments involved is attention to two sections appearing in article VI of our State Constitution — the judiciary article — and to the amendments of those sections accomplished by the vote of the people on November 8, 1977, effective January 1, 1978 to become operative on April 1, 1978. Section 26 of that article speaks to temporary assignments of Judges or Justices to other courts, identifying the courts to which Judges or Justices of other, specified courts may be temporarily assigned. Included therein is a provision permitting a Judge of a New York City court to be assigned to Supreme Court in the judicial department of his residence (subd g). Prior to January 1, 1978 subdivision i of the section provided that temporary assignments of the Judges or Justices was to be made by the Appellate Division of the Supreme Court of the department or departments concerned. As of that date the text of subdivision i was amended to read as follows: “Temporary assignments of all the foregoing judges or justices listed in this section shall be made by the chief administrator of the courts in accordance with standards and administrative policies established pursuant to section twenty-eight of this article.”

Section 28 of article VI addresses the much broader subject of administrative supervision of the courts. Prior to 1978 the authority and responsibility for supervision of the unified court system was vested in the Administrative Board of the Judicial Conference, consisting of the Chief Judge of the Court of Appéals and the Presiding Justices of the four Appellate Divisions. The section provided then that the Administrative Board should establish standards and administrative policies for general application throughout the State and that, in accordance with the standards and policies so established, the Appellate Divisions should supervise the administration and operation of the courts in their respective departments. As of January 1,1978 the text of the section was significantly changed; it now provides that the Chief Judge of the Court of Appeals shall be the Chief Judge of the State of New York and the chief judicial officer of the unified court system, that there shall be an Administrative Board (of the same composition as that authorized by the section in its previous form), and that the Chief Judge, with the advice and consent of the Administrative Board, shall appoint a Chief Administrator of the Courts, who, on behalf of the Chief Judge, shall supervise the administration and operation of the unified court system, with such powers and duties as may be delegated to him by the Chief Judge or conferred by law. Subdivision c of the section provides: “The chief judge, after consultation with the administrative board, shall establish standards and administrative policies for general application throughout the state, which shall be submitted by the chief judge to the court of appeals, together with the recommendations, if any, of the administrative board. Such standards and administrative policies shall be promulgated after approval by the court of appeals.”

The changes in subdivision i of section 26 and section 28 described above reflected the radical change in administration of the unified State court system accomplished by the constitutional amendments approved at the general election in November, 1977. Responsibility for. and supervision of the administration and operation of the courts were shifted from the Administrative Board and Appellate Divisions to the Chief Judge of the State and his appointee acting on his behalf, the Chief Administrator of the Courts. In the adoption and promulgation of standards and administrative policies relevant to the newly conferred functions of supervision, a restriction was imposed which assures multistage, multiperson review, comment and approval before promulgation of guiding principles and precepts — i.e., the standards and policies must be considered by the Chief Judge in consultation with the Administrative Board (thereby involving the Presiding Justices of each of the Appellate Divisions), followed by submission to the Court of Appeals. Only after approval by that court may they be promulgated and made effective (see Corkum v Bartlett, 46 NY2d 424, 430).

That this structured system of review and approval is applicable to the making of all temporary assignments of Judges from New York City Civil and Criminal Courts to serve in Supreme Court is apparent from the texts of article VI (§ 26, subd i; § 28, subd c) read together. The first of these sections, providing for the manner of making temporary assignments, explicitly requires that such assignments be made by the Chief Administrator “in accordance with standards and administrative policies established pursuant to section twenty-eight of this article.” Subdivision c of section 28 in turn is explicit that standards and administrative policies are established by the Chief Judge after consultation with the Administrative Board, submission to the Court of Appeals and approval by it, and in no other way.

It is thus evident that, before action may be taken by the Chief Administrator of the Courts under subdivision i of section 26 to make temporary assignments of Judges or Justices of one court to serve in another, standards and administrative policies for general application throughout the State must have been established pursuant to subdivision c of section 28. Without them, such assignments are not constitutionally authorized. The authority vested in the Chief Administrator by the Constitution is not broad and unlimited but is subject to being exercised in conformity with standards which have been established in accordance with constitutional prescription. So here, he had no authority to implement the rotation plan for acting Supreme Court designations.

In reaching this conclusion we reject the argument offered by appellants that subdivision i of section 26 is self-executing and that the reference therein to assignments being made “in accordance with” the described standards requires no more than that they must not conflict with existing standard or administrative policy, if any there be. The interpretation tendered would render meaningless the requirement that there be established pertinent standards and policies following consultation with the Administrative Board and approval of the Court of Appeals. We think the more evident and more appropriate translation is “pursuant to” established standards — which prevents the determination of criteria for making temporary assignments (a subject of sufficient importance to occupy a section of the Constitution) by a single, administrative officeholder and compels participation at a policy-making level by the State’s highest judicial officers. This interpretation implements the constitutional reform of 1977 effecting centralized administration of the courts through the recognition of its system of checks and balances.

The contention that because the rotation plan announced in October, 1981 concerned only temporary assignments within New York City no standards or administrative policies were required to be established in the manner provided by section 28, is without merit. The requirement of standards and policies is not limited to temporary assignments which are State-wide. The phrase “for general application throughout the state” appearing in subdivision c of section 28 describes the standards and policies to be established under that subdivision, not the making of temporary assignments, which is covered in section 26. The impact of the two related sections is that temporary assignments, wherever made and whether local or State-wide, must be made in conformity with defined, general principles having State-wide application.

Any reliance on sections 211 and 212 of the Judiciary Law as authority for the making of temporary assignments between courts without relevant standards and administrative policies is misplaced. Beyond the fact that those statutory sections could not create a less restricted power to make such assignments than that provided by the Constitution, it is to be observed that the reference in section 212 (subd 2, par [c]) to the power of the Chief Administrator of the Courts to make temporary assignments of Judges and Justices of the unified court system expressly provides that the authority to do so is authority “in accordance with the provisions of section twenty-six of article six of the constitution”, and that section 211 (subd 1, par [a]), stating that the Chief Judge shall establish standards and administrative policies, repeats in part the procedure for such establishment set forth in article VI (§ 28, subd c) of the Constitution.

Nor is there merit to the argument that, if standards and administrative policies be necessary, sufficient standards exist by reason of two rules of the Chief Judge promulgated, following their approval by the Court of Appeals, in April, 1978 when the constitutional amendments relating to administration of the unified court system became operative. The first of the two — rule 445.1 (22 NYCRR 445.1 [now rule 1.1]), titled “Chief Judge and Chief Administrator; exercise of administrative powers and duties”, provided in part: “(a) Establishment of the regular hours, terms and parts of court, and assignments of judges and justices to them, other than temporary assignments, shall be done in consultation and agreement with the presiding justices of the appropriate appellate divisions on behalf of their respective courts”.

The argument advanced is that, because the words “temporary assignments” are used in an exception to the provision that assignment of Judges and Justices shall be done “in consultation and agreement with” Appellate Division Presiding Justices, such temporary assignments lie within the unfettered authority of the Chief Administrator. The argument fails to take into account, however, the fact that the quoted portion of the rule does not address and has no relevance to temporary assignments, in the constitutional sense, of Judges or Justices of one court to serve in another. It is an enabling provision which relates to the establishment of regular hours, terms and parts within a court and the assignment thereto of Judges already serving as members of such court (whether by election, appointment or “temporary assignment” otherwise constitutionally made), after consultation with and agreement of the respective Presiding Justice. Such consultation and agreement originally were dispensed with as to assignments to permit response to needs arising on short notice, as by reason of sudden illness; in its present form the rule similarly permits the Chief Administrator alone to make temporary adjustments in court hours, terms and parts. To construe the exemption of “temporary assignments” as used in this rule to support the creation of a standard or administrative policy with respect to the intercourt, temporary assignments treated in section 26 of article VI of the Constitution to which the rotation plan here under review is addressed would leave the express .constitutional directive that there be standards and policies without meaning.

The second rule of the Chief Judge cited as furnishing the necessary standards is rule 445.3 (22 NYCRR 445.3 [now rule 1.3]), which provides insofar as relevant: “(a) All rules and standards of the Administrative Board of the Judicial Conference, except Part 33 (rules governing judicial conduct), in effect on March 31, 1978, shall be continued in effect as standards and administrative policies established, approved and promulgated pursuant to article VI, section 28(c) of the Constitution, until expressly superseded by new rules or standards and administrative policies”. The argument made is that this rule, continuing prior standards, meets the constitutional requirement with respect to temporary assignments. It fails however because the prior rules and standards of the Administrative Board made no provision for temporary assignments between courts by the Chief Administrator. The reason for this omission is obvious when it is recalled that, prior to the operative date of the amendments to article VI (April 1, 1978) such assignments were made by the various Appellate Divisions without the necessity for any formal, common, guiding standards or principles. Rule 445.3 may not be read as providing the constitutionally required standards and policies for temporary intercourt assignments by the Chief Administrator by a continuation of the absence of standards which served appropriately when, prior to centralization of court administration, the authority to make such assignments was dispersed among four appellate courts, each of which administered the courts within its jurisdiction, in large measure without regard for any necessity for State-wide uniformity.

In sum, the authority granted the Chief Administrator of the Courts in article VI (§ 26, subd i) of the Constitution to make temporary assignment of Judges from one court to another (and subd i is the only source for such authority), may be exercised only pursuant to standards and administrative policies duly established in conformity with the provisions of article VI (§ 28, subd c). No pertinent standards or administrative policies have been established. Accordingly, respondents are entitled to a declaration that the Chief Administrator of the Courts had no authority to implement the rotation plan.

The Judges of the Civil and Criminal Courts of the City of New York who have been acting under temporary assignments made pursuant to the plan have been serving as de facto Supreme Court Justices (People v Czajka, 11 NY2d 253; Sylvia Lake Co. v Northern Ore Co., 242 NY 144; Matter of Trounstine v Britt, 212 NY 421; Curtin v Barton, 139 NY 505). To allow them appropriate opportunity to conclude the matters now pending before them, and to permit the establishment of appropriate standards and administrative policies, the declaration of the Appellate Division will be made effective July 1, 1982.

The order of the Appellate Division should be modified, without costs, to the extent of making the declaration therein effective July 1, 1982, and, as so modified, affirmed.

Fuchsberg, J.

(concurring in result). It seems to me important that we recognize that, in this affair, under our State Constitution this court necessarily operates on two levels, judicial and administrative. These cannot always be discrete. For instance, our managerial function includes, pertinently, the approval or disapproval of standards and administrative policies promulgated for the governance of our unified court system; at the same time, we now pass judgment in an important controversy relating to the exercise or nonexercise of our power.

This in mind, I agree that the 31 Civil and Criminal Court Judges now temporarily assigned to the Supreme Court should conclude their present tours of duty as of July 1,1982. And I further agree that, in the interim, standards and administrative policies to regulate the selection and service of their successors, be these the same individuals or others, should be devised and established anew by the Chief Judge after consultation with the Administrative Board and subject to approval of this court.

But, though I join in these dispositions, the path by which they are reached does not coincide, in part, with that taken by the Per Curiam opinion. For one thing, I would hold that the Chief Judge and the Chief Administrator, in making the assignments in question, have at all times acted under at least implied, if not express, authorization to do so. I respectfully suggest to say anything less is grossly unfair.

For another thing, in my view, this court’s power to approve a standard or policy almost of necessity implies a right to withdraw its approval. Else, a practice, once approved, would be beyond the power of the court to change, however desirable it might be thought to be. In the circumstances of the considerable controversy engendered by the rotation and screening features which, with the best of intentions, lately were added to the temporary appointment process, I believe it wise to now take such a step.

That the Chief Judge and Chief Administrator at all times acted within their authority is borne out by the recent history of the administration of this State’s courts. For present purposes, a good point of departure may well be 1962, when an insufficient complement of Supreme Court Justices, but one of the many shortages from which the system suffered, was somewhat allayed by temporary assignments made by the Appellate Divisions pursuant to former sections 26 and 28 of article VI of the State Constitution. The assignments were to be made in accordance with policies adopted by the Administrative Board of the Judicial Conference, in whose members the power to manage the then diversified court system largely was lodged. So the situation remained until 1977, when the people adopted the constitutional court reorganization plan which produced the unified system. To that end, it centralized control in the Chief Judge and, through this office, in that of Chief Administrator, in the process relegating the Administrative Board to a consultative role. It was then too that, for the first time, the ultimate power to pass on policy was placed in our court. This radical change came about during the tenure of the present Chief Judge’s predecessor and it was the latter and the then Chief Administrator who effected the necessary transition.

Thus it was that the former Chief Judge, on March 31, 1978, after consultation with the Administrative Board and with the written approval of the Court of Appeals, promulgated a standard and administrative policy relating to assignment of Judges. Comprising section 445.1 (now rule 1.1) of newly adopted Rules of the Chief Judge, it stated: “Establishment of the regular hours, terms and parts of court, and assignments of judges and justices to them, other than temporary assignments, shall be done [by the Chief Administrator] in consultation and agreement with the presiding justices of the appropriate appellate divisions on behalf of their respective courts; provided that if the Chief Administrator and a presiding justice are unable to agree, the matter shall be determined by the Chief Judge” (emphasis added).

This Chief Judge’s rule constituted the first and only reference in the standards and administrative policies relating to temporary assignments of Judges. As the respondents’ brief notes, by expressly exempting temporary assignments from the consultation procedures relating to other judicial assignments, consistent with prior practice, it left full discretion to determine the manner of these temporary assignments to the Chief Administrator.

Now, when the present Chief Judge and the Chief Administrator he appointed took office, this system of appointment continued to be carried on in accordance with the approved directive of the prior Chief Judge. It is significant that during the remainder of the prior Chief Judge’s term and that of the present Chief Judge, literally dozens and dozens of New York City Civil and Criminal Court Judges were being assigned to the Supreme Court under this rule. During these years no further standard or administrative policy was ever submitted to alter the by now long-established methodology for the making of such assignments. Yet, this court never raised the slightest objection to it. The conclusion is, therefore, inescapable that the court assumed that its approval of rule 1.1 provided all the authorization necessary for such appointments and that, for the same reasons, the new Chief Judge, who inherited the recognized practice, had a similar right to assume that the standard and policy approval it reflected continued undisturbed.

This said, I cannot gainsay that, especially from a retrospective vantage point and in the elastic context of statutory definition, it is not too difficult to interpret rule 1.1, as does the Per Curiam, as though it were not applicable to the temporary appointees with whom we are concerned (see, generally, Llewellyn, Remarks on the Theory of Appellate Decision and the Rules or Canons About How Statutes are to be Construed, 3 Vand L Rev 395). Nor, pragmatically, on this point, do I see any reason to take issue with the clarification this constitutes. This I do while fully appreciating the stance taken by Justice Sandler at the Appellate Division, where he expressed the thought that, while “[a]s a matter of textual analysis either construction is verbally plausible”, when “subdivision (a) of section 445.1 is considered with the group of standards and policies then promulgated of which it was an integral part * * * the construction urged by respondents appears much more probably correct” (85 AD2d, p 478). Or, as this court wrote realistically in a time frame only six months after we had given written approval to rule 1.1, “though policy statements may be detailed they often are brief but broad statements of principle, identifying goals to be achieved while leaving to administrative implementation the methodology by which these goals are in fact to be reached” (Corkum v Bartlett, 46 NY2d 424, 431). For, once one ceases to wrestle with the written matter, the bottom line is that the presence in the past of silent acquiescence, indeed of at least de facto approval, cannot be denied.

Be that as it may, in casting my judicial-administrative vote for withdrawal of approval of the existing procedure for the temporary appointments at stake, I do so with confidence that the establishment of standards and policies which the Chief Judge will now propose will provide the occasion not only for constructive input incident to approval by the Court of Appeals, but, prior thereto, for at least equal input by the Presiding Justices of the Appellate Divisions, who, as members of the Administrative Board, are to play a most “significant consultative role in management decisions which affect the trial courts in each of the diverse areas of our State” (Preamble to Standards and Administrative Policies, eff April 1, 1978).

Judges Jasen, Gabrielli, Jones, Wachtler and Meyer concur in Per Curiam opinion; Judge Fuchsberg concurs in result in a separate opinion; Chief Judge Cooke taking no part.

Order modified, etc.

      . Subsequent announcements postponed the time when assignments under the rotation plan would be made to January 25, 1982 and revised the number of Acting Supreme Court Justices to be replaced each year from one half to one third of those serving.

      . While the appeal was pending before the Appellate Division that court granted permission to Judge Jack Rosenberg, a Judge of the Criminal Court of the City of New York whose temporary assignment to Supreme Court, Bronx County, had been terminated under the plan, to intervene in the appeal as a party petitioner.

      .  At the outset we dispose of any speculation that, because one of the constitutional deficiencies urged by petitioners was the failure to obtain approval of any pertinent standard or administrative policy by the Court of Appeals, the members of this court should decline to participate in the appeal. Even if we were to assume that a disqualifying ex officio interest exists which might be a basis for recusal (but see Matter of Ryers, 72 NY 1), we would nevertheless be required to proceed in the matter under the “Rule of Necessity”. As stated by Sir Frederick Pollock, that rule mandates that “although a judge had better not, if it can be avoided, take part in the decision of a case in which he has any personal interest, yet he not only may but must do so if the case cannot be heard otherwise” (Pollock, A First Book of Jurisprudence [6th ed, 1929], p 270; cf. United States v Will, 449 US 200). With respect to the litigation before us, this court has exclusive jurisdiction under the Constitution of this State to hear the appeal from the order of the Appellate Division (art VI, § 3, subd b, par 1); no other judicial body exists to which this appeal could be referred for disposition. Nor would the situation be different if the members of this court were to recuse themselves and summon other jurists to serve in their place for the purpose of deciding this appeal. Substitute Judges who might be designated to this Bench would themselves, for the period of their service, assume the institutional character of this court and would therefore be subject to the same suggestion of disability that might be thought to exist as to the court as presently composed. Indeed, the present circumstance is not conceptually different from the situation in which the court is called on to determine the scope of its own jurisdiction, a determination which it makes with some frequency. Finally, to the extent that there might be apprehended some personal discomfiture to the members of this court in ruling on an appeal in which the Chief Judge is a litigant, such discomfort provides no justification for our declining to execute the duties of our judicial offices.

        . No conclusion should be drawn that provisions for temporary assignments peculiar to the needs of particular localities are foreclosed. What is necessary is only that any such localized provisions shall be in conformity with State-wide standards and policies established as provided in subdivision c of section 28.

      . Present rule 1.1 varies from former rule 445.1 in that it also makes exception for “temporary hours, terms and parts” of court.

      . We note that the concurring-in-result opinion appears to be predicated on the fundamentally erroneous and troublesome proposition that the mandates of our State Constitution may be fulfilled by implication or de facto acquiescence. This is not the case and such requirements are not to be satisfied in any such casual manner. Nor could this court take the pendency before it of an appeal in a judicial proceeding as an occasion for the exercise of its discrete administrative authority.

      . The Chief Judge of the Court of Appeals and the Presiding Justices of each of the four divisions of the Supreme Court comprise the Administrative Board (Judiciary Law, § 210, subd 2).

      . Instead, only as recently as December 17, 1981, effective as of January 1, 1982, the Court of Appeals expressly approved a revision of Rules of the Chief Judge, which, while renumbering rule 1.1 as rule 1.1 (a), as it bears on the present case left the rule unchanged: “Chief Judge and Chief Administrator; Exercise of administrative powers and duties, (a) Establishment of the regular hours, terms and parts of court, other than temporary hours, terms and parts, and assignments of judges and justices to them, other than temporary assignments, shall be done in consultation and agreement with the presiding justices of the appropriate Appellate Divisions on behalf of their respective courts provided that if the Chief Administrator and a presiding justice are unable to agree, the matter shall be determined by the Chief Judge” (emphasis added).

      . It may not be amiss to add that, except for the identity of the appointing authority, the fashion in which the Acting Supreme Court Justices were designated antedated the 1977 constitutional change by years (intervenor-appellee Judge Jack Rosenberg was first appointed some 11 years ago). Consonantly, section 3 of “standards and administrative policies”, effective April 1, 1978, with the approval of the Court of Appeals, under the subheading “Existing Rules”, decreed that: “All rules and standards of the Administrative Board of the Judicial Conference * * * shall be continued in effect as standards and administrative policies established, approved, and promulgated pursuant to Article VI, section 28(c), of the Constitution, until expressly superseded by the new rules or standards and administrative policies. Unless a contrary construction is required, references to the Administrative Board of the Judicial Conference shall be deemed references to the Chief Judge of the Court of Appeals; references to the State Administrator and State Administrative Judge shall be deemed references to the Chief Administrator of the Courts; and references to the Appellate Divisions shall be deemed references to the Chief Administrator of the Courts”.


author: Jasen, J.

text:
    Myrna P. Levine, Respondent, v Terry J. Levine, Appellant.
    Argued March 30, 1982;
    decided May 18, 1982

      POINTS OF COUNSEL

      William C. Herman and Lester A. Levin for appellant.
    I. The fact of a single attorney acting as a scrivener attorney for both parties to a separation agreement is not sufficient in and of itself to establish overreaching requiring the setting aside of such agreement. (Perry v Perry, 64 AD2d 625; Stern v Stern, 63 AD2d 700; Christian v Christian, 42 NY2d 63; Perlmutter v Perlmutter, 65 AD2d 601; Freimour v Freimour, 78 AD2d 896.) II. The court below was in error in setting aside the agreements herein without examining the terms and provisions thereof. Upon such examination it will be found that same are fair and equitable in all respects. (Christian v Christian, 42 NY2d 63; Stern v Stern, 63 AD2d 700; Perlmutter v Perlmutter, 65 AD2d 601; Goodison v Goodison, 66 AD2d 923, 48 NY2d 786; Perry v Perry, 64 AD2d 625.) III. Appellant failed to prove her case that there was coercion or undue influence, overreaching or that the agreement was unfair by a fair preponderance of the credible evidence. (Simon v Krimko, 139 App Div 187; Lopp v Lopp, 191 App Div 500; Southard v Curley, 134 NY 148; Matter of Nowakowski, 2 NY2d 618; Boyd v Boyd, 252 NY 422; Perry v Perry, 64 AD2d 625.) IV. Respondent has failed to establish any coercion or undue influence. Respondent in any event would be estopped from the assertion of same as a result of the ratification of the agreement and modifications thereof. (Port Chester Elec. Constr. Corp. v Hastings Terraces, 284 App Div 966; Grubel v Union Mut. Life Ins. Co., 54 AD2d 686; 1163 Realty Corp. v United Institutional Servicing Corp., 55 AD2d 908; Fowler v Fowler, 197 App Div 572.) V. The sequestration or exclusion of witnesses is purely discretionary with the trial court. (Publishers’ Book Bindery v Ziegelheim, 184 Misc 559.)

      Frank Silverstein and Marshall S. Goldman for respondent.
    I. The court below properly reversed the trial court on the facts, and the Court of Appeals, on this record, may not make new findings. (Crooks v People’s Nat. Bank of Malone, 177 NY 68; Frank v Von Bayer, 236 NY 473.) II. The separation agreement was not freely and voluntarily entered into by plaintiff. (Christian v Christian, 42 NY2d 63; Marotta v Lattingtown Harbor Dev. Co., 20 Misc 2d 338; Port Chester Elec. Constr. Corp. v Hastings Terraces, 284 App Div 966; Perlmutter v Perlmutter, 65 AD2d 601; Krause v Krause, 282 NY 355; Tamas v Tamas, 47 AD2d 686.) III. The husband’s attorney represented both sides in the preparation and execution of the agreement and therefore did not properly represent plaintiff-appellant. (Perry v Perry, 64 AD2d 625; Corcoran v Corcoran, 73 AD2d 1037; Rosenheck v Rosenheck, 69 AD2d 878; Goodison v Goodison, 66 AD2d 923, 48 NY2d 786; Christian v Christian, 42 NY2d 63; Stern v Stern, 63 AD2d 700.) IV. The Judge improperly refused to exclude Mr. Barnhard from the courtroom. (Philpot v Fifth Ave. Coach Co., 142 App Div 811.) V. The court failed to take into consideration the financial circumstances and standard of living of the parties at the time of the signing of the agreement. VI. Since defendant did not take the witness stand in his own behalf, the court should have inferred the truth of plaintiff’s statements. (Matter of Cohen, 7 NY2d 488.)
   OPINION OF THE COURT

Jasen, J.

We are asked on this appeal to determine whether the fact that a separation agreement was prepared by one attorney representing both the husband and wife is sufficient, in and of itself, to establish overreaching requiring a rescission of the agreement.

The parties were married on October 18, 1958 and have two children. Due to a variety of differences, the couple separated in 1971. On February 17,1976, they entered into a separation agreement. At the time, the husband was operating an auto supply parts business and, according to the record, was earning $20,000 per year. The wife was employed as a bookkeeper for her husband’s business and earned approximately $170 per week.

The separation agreement provided, among other things, that the wife was to retain custody of the children. The wife was also awarded the right to occupy the marital residence and ownership of all the furniture therein was transferred to her. The husband agreed to pay $125 per week in support for the wife and the two children. In addition, the husband agreed to pay for the children’s private education, health insurance, clothing and medical bills. The husband also assumed all carrying charges on the marital residence, including taxes and mortgage interest payments, and agreed to provide the wife with the free use of a Cadillac automobile. For her part, the wife agreed to transfer her half interest in a boat owned by the couple. Although the boat had a market value of between $40,000 and $50,000, it was encumbered by a substantial mortgage.

The separation agreement was prepared by an attorney, related to the husband by marriage, who had previously represented the husband in connection with his business and who had known both parties for a number of years. The husband initially contacted the attorney and informed him that he had discussed the possibility of a separation agreement with his wife and that the couple had agreed on the essential terms. The attorney then arranged to meet with the wife at his office.

At this meeting, the attorney told the wife that he was involved in the matter only because the basic terms of the agreement had already been settled by the parties and that the wife was free to seek the advice of another attorney. Based on conversations with both parties, the attorney prepared a draft agreement. Further negotiations and consultations followed, after which a final agreement was drawn up, thoroughly reviewed by plaintiff, and then signed by her.

On June 14,1976, the parties executed an amendment to the separation agreement in order to arrange for the sale of the marital residence and the purchase of a second house. A second amendatory agreement, dated November 19, 1976, provided for the transfer of the Cadillac referred to in the original agreement to plaintiff. The husband, based on the 1976 separation agreement, obtained a conversion divorce (see Domestic Relations Law, § 170, subd [6]) on August 23, 1977.

The wife then commenced this action seeking to have the separation agreement and the two subsequent modifications thereof set aside as “inequitable” and “unconscionable”. In her complaint, the wife alleged that she “was not represented by counsel of her own choosing, but instead and without her consent was represented by the defendant’s attorney” in the execution of the separation agreement and subsequent modifications. The wife further alleged that the husband “coerced and exerted undue influence and overreaching on the plaintiff” such that “plaintiff’s use of defendant’s attorney was nót a choice freely made by plaintiff.”

After a nonjury trial, the wife’s complaint was dismissed for failure to make out a prima facie case. The court found no evidence of coercion, undue influence or overreaching practiced by the husband. The court also concluded that the agreement was fair, and a specific finding was made that the attorney had “managed to preserve neutrality” throughout his joint representation of the couple.

On appeal, a unanimous Appellate Division reversed, on the law and the facts, and granted the wife judgment setting aside the separation agreement. After noting that the wife was represented by her husband’s counsel, the court below stated: “Upon this record, we conclude that the circumstances evince a sufficient degree of overreaching on the part of the husband to require that this separation agreement be set aside.” (83 AD2d 606.) There should be a reversal.

At the outset, it should be noted that, in the posture in which this case comes before us, the standard of review is rather limited. Where, as here, the Appellate Division reverses “on the law and the facts” and makes new findings, we must examine the record to determine whether the weight of the credible evidence supports the trial court’s findings or the new findings made by the Appellate Division. (NY Const, art VI, § 3, subd a; CPLR 5501, subd [b].) In our view, the weight of the evidence supports the finding made by the trial court that the separation agreement was not the prodüct of overreaching by the husband. Moreover — and this would be fatal to the wife’s claim, as a matter of law — there was no factual determination at the Appellate Division that the terms of the agreement were unfair to the wife. To establish her entitlement to the relief which she seeks, the wife would have to demonstrate both overreaching and unfairness.

For the most part, a separation agreement which is regular on its face will be recognized and enforced by the courts in much the same manner as an ordinary contract. However, because of the fiduciary relationship between husband and wife, separation agreements generally are closely scrutinized by the courts, and such agreements are more readily set aside in equity under circumstances that would be insufficient to nullify an ordinary contract. (Christian v Christian, 42 NY2d 63, 72; see, also, McGahee v Kennedy, 48 NY2d 832, 834.) Although courts may examine the terms of the agreement as well as the surrounding circumstances to ascertain whether there has been overreaching, the general rule is that “[i]f the execution of the agreement * * * be fair, no further inquiry will be made.” (Christian v Christian, supra, at p 73.)

Nor does the fact that the same attorney represented both parties in the preparation of the agreement require an automatic nullification of the agreement. While the absence of independent representation is a significant factor to be taken into consideration when determining whether a separation agreement was freely and fairly entered into, the fact that each party retained the same attorney does not, in and of itself, provide a basis for rescission. (Perry v Perry, 64 AD2d 625; see, e.g., D’Arc v D’Arc, 164 NJ Super 226; McCarty v McCarty, 300 SW2d 394 [Mo]; Whitney v Seattle-First Nat. Bank, 90 Wn 2d 105; Marshall v Marshall, 273 SE2d 360 [W Va]; see, generally, Independent Advice as Essential to Validity of Transaction Between Persons Occupying a Confidential or Fiduciary Relationship, Ann., 123 ALR 1505.) Of course, a claim of overreaching will be subject to a “far more searching scrutiny” and, as a result, is less likely to prevail where the party had the benefit of independent representation during the negotiation and execution of the agreement. (2 Lindey, Separation Agreements and Ante-Nuptial Contracts [rev ed], § 37, subd 9, p 37-22 [and cases cited therein].) On the other hand, where one attorney has represented both parties to the agreement, a question of overreaching on the part of the party who is the prime beneficiary of the attorney’s assistance may arise. Nevertheless, as long as the attorney fairly advises the parties of both the salient issues and the consequences of joint representation, and the separation agreement arrived at was fair, rescission will not be granted. (Perry v Perry, supra.) While the potential conflict of interests inherent in such joint representation suggests that the husband and wife should retain separate counsel, the parties have an absolute right to be represented by the same attorney provided “there has been full disclosure between the parties, not only of all relevant facts but also of their contextual significance, and there has been an absence of inequitable conduct or other infirmity which might vitiate the execution of the agreement”. (Christian v Christian, 42 NY2d 63, 72, supra.)

Applying these principles to the case before us, we cannot conclude that it was error for the trial court, as a matter of law, to have found that the separation agreement in this case is fair, both on its face and when considered in light of the parties’ circumstances at the time of execution. The husband undertook a variety of financial obligations, all of which were designed to maintain the wife and the two children in the style to which they were accustomed to living. Although the wife has contended throughout this action that the husband earns a far greater income than the record reflects, she has not come forward with an evidentiary showing to support this claim. We agree with the trial court that the wife’s bare allegations to the effect that the husband has been “living high on the hog” provide no basis for overturning the parties’ agreement.

Contrary to the determination below, the fact that the same attorney represented both parties in the preparation of the separation agreement does not, without more, establish overreaching on the part of the husband. The record discloses that the attorney had been an acquaintance of the husband and wife for a number of years. He agreed to draft the separation agreement only because the parties, prior to consulting him, already had reached an accord on the essential terms. Even then, the attorney told the wife that she could consult with another attorney, but the wife declined to do so. In addition, the wife expressly acknowledged in the separation agreement itself that the attorney had previously represented her husband, that she had “complete faith and trust in him” as her attorney, and that through his representation she was “entering into a better agreement than if she had consulted with independent counsel who tried to bargain for a better agreement”. Most importantly, the trial court specifically found that the attorney remained neutral throughout his involvement with the parties, and this particular finding was not disturbed by the Appellate Division. Under these circumstances, any inference of overreaching on the part of the husband arising from the joint representation properly was rejected by the trial court.

Finally, we cannot say, as a matter of law, that the trial court abused its discretion by failing to grant plaintiff’s request to exclude the attorney who drafted the agreement from the courtroom during the taking of testimony from other witnesses. (See Richardson, Evidence [10th ed], § 460.) In any event, even assuming error, there has been no showing of any prejudice occasioned by this failure to exclude such as would require a new trial.

Accordingly, the order of the Appellate Division should be reversed, with costs, and the judgment of Supreme Court, Westchester County, reinstated.

Chief Judge Cooke and Judges Gabrielli, Jones, Wachtler, Fuchsberg and Meyer concur.

Order reversed, etc.