author: Stein, J. Pigott, J.

text:
    [66 NE3d 673, 43 NYS3d 803]
    In the Matter of James R. Diegelman et al., Appellants, v City of Buffalo et al., Respondents.
    Argued October 14, 2016;
    decided November 21, 2016

      POINTS OF COUNSEL

      Lipsitz Green Scime Cambria LLP, Buffalo (John A. Collins of counsel), for appellants.

      Timothy A. Ball, Corporation Counsel, Buffalo {David M. Lee of counsel), for respondents.
   OPINION OF THE COURT

Stein, J.

In this appeal, we are asked to determine whether a police officer who is entitled to receive benefits under General Municipal Law § 207-c for a duty-related injury is barred from bringing a claim against his or her employer under General Municipal Law § 205-e. We conclude that, where the municipal employer has elected not to provide coverage pursuant to the Workers’ Compensation Law, a police officer who suffers a line-of-duty injury caused by the employer’s statutory or regulatory violations may pursue a section 205-e claim.

I.

Respondent City of Buffalo (the City) employed claimant James R. Diegelman as a police officer from 1968 until 1995. On August 9, 2012, he was diagnosed with mesothelioma, a cancer caused by exposure to asbestos. Claimant and his wife, Andrea M. Diegelman (hereinafter claimants), allege that exposure to asbestos occurred during his employment at properties owned by the City and respondent Board of Education, and used by the Police Department. Claimants commenced this proceeding seeking permission to serve a late notice of claim on the City. In opposition, the City argued, among other things, that leave should be denied on the ground that the claim was patently without merit because General Municipal Law § 207-c provides the exclusive remedy for the alleged work-related injuries.

Supreme Court granted claimants’ application for permission to serve a late notice of claim on the City. The City appealed, and the Appellate Division reversed on the law and denied the application (129 AD3d 1527 [4th Dept 2015]). The Appellate Division agreed with the City that the claim was barred by General Municipal Law § 207-c and, thus, held that claimants’ application should be denied because “leave to file a late notice of claim is not appropriate for a patently meritless claim” (129 AD3d at 1527 [internal quotation marks and citation omitted]). This Court granted claimants’ motion for leave to appeal (26 NY3d 913 [2015]).

IL

This appeal turns on the interplay of General Municipal Law §§ 205-e and 207-c, and the Workers’ Compensation Law. “In addition to any other right of action or recovery under any other provision of law,” section 205-e permits police officers to bring tort claims for injuries sustained “while in the discharge or performance at any time or place of any duty imposed by . . . superior officer[s]” where such injuries occur “directly or indirectly as a result of any neglect, omission, willful or culpable negligence of any person or persons in failing to comply with the requirements of any of the statutes, ordinances, rules, orders and requirements of the federal, state, county, village, town or city governments” (General Municipal Law § 205-e [1]). Separately, section 207-c “provides for the payment of the full amount of regular salary or wages,” along with payment for medical treatment and hospital care, “to a police officer or other covered municipal employee who is injured ‘in the performance of his [or her] duties’ or is taken ill ‘as a result of the performance of [such] duties’ ” (Matter of Theroux v Reilly, 1 NY3d 232, 239 [2003], quoting General Municipal Law § 207-c [1]). The Workers’ Compensation Law is, of course, “ ‘the State’s most general and comprehensive social program, enacted to provide all injured employees with some scheduled compensation and medical expenses, regardless of fault for ordinary and unqualified employment duties’ ” (Theroux, 1 NY3d at 242, quoting Matter of Balcerak v County of Nassau, 94 NY2d 253, 259 [1999]; accord Auqui v Seven Thirty One Ltd. Partnership, 22 NY3d 246, 255-256 [2013]).

It is well settled that workers’ compensation benefits are generally the “sole and exclusive remedy of an employee against his [or her] employer for injuries in the course of employment,” and that the receipt of such benefits “precludes suits against an employer for injuries in the course of employment” (Weiner v City of New York, 19 NY3d 852, 854 [2012]). Thus, the right of action contained in section 205-e is subject to a proviso that “nothing in th[at] section shall be deemed to expand or restrict any right afforded to or limitation imposed upon an employer, an employee or his or her representative by virtue of any provisions of the workers’ compensation law” (General Municipal Law § 205-e [1]). In other words, the proviso prohibits “recipients of workers’ compensation benefits [from] su[ing] their employers in tort under section 205-[e]” (Weiner, 19 NY3d at 855).

Inasmuch as the City of Buffalo, like many other large municipalities, has elected not to provide workers’ compensation benefits to its police officers (see generally Matter of Leone v Oneida County Sheriff's Dept., 80 NY2d 850, 851 [1992]), claimants argue that the proviso in section 205-e (1) is inapplicable to this action. They maintain that the Appellate Division erred in extending the proviso’s bar on suits to cover not just recipients of workers’ compensation benefits but, also, recipients of General Municipal Law § 207-c benefits. The City responds that section 207-c “is essentially a super workers’ compensation scheme for police officers” and, thus, workers’ compensation exclusivity rules should apply to police officers who receive section 207-c benefits, regardless of whether they are entitled to benefits under the Workers’ Compensation Law.

Workers’ Compensation Law § 30 (3) provides that “any salary or wages paid . . . , or the cost of any medical treatment or hospital care provided [,] . . . under and pursuant to the provisions of section [207-c] shall be credited against any award of [workers’] compensation.” As this Court has previously recognized, the purpose of Workers’ Compensation Law § 30 (3) is to “avoid duplication of benefits” inasmuch as there is some overlap between workers’ compensation benefits and section 207-c benefits (Leone, 80 NY2d at 852). However, workers’ compensation benefits and General Municipal Law § 207-c benefits are neither equivalent nor “mutually exclusive” such that the payments of benefits under one statute forecloses payment under the other statute (Matter of McKay v Town of W. Seneca, 51 AD2d 373, 378 [3d Dept 1976, Mahoney, J., dissenting], revd on dissenting op of Mahoney, J., 41 NY2d 931 [1977]; see Leone, 80 NY2d at 851-852). Rather, the two statutory compensation systems are independent of each other and, contrary to the City’s argument that section 207-c is essentially a super workers’ compensation scheme, the Workers’ Compensation Law “features a more lenient and more inclusive standard of covered activity than is intended to be covered and compensated in a General Municipal Law § 207-c benefits universe” (Balcerak, 94 NY2d at 261).

In enacting the two statutes, “the Legislature chose different eligibility standards—‘arising out of and in the course of employment’ for workers’ compensation benefits; ‘in the performance of his [or her] duties’ for section 207-c benefits” (Theroux, 1 NY3d at 242). Pursuant to those differing standards, “police . . . officers may be eligible for Workers’ Compensation benefits as a result of circumstances that might not entitle them to General Municipal Law § 207-c benefits” (Balcerak, 94 NY2d at 260). Specifically, “[w]orkers’ compensation benefits are intended to be dispensed regardless of fault, for any injury arising out of and in the course of one’s employment ...[,] [while]. [s]ection 207-c benefits . . . are more expansive, but apply to a narrower class of work-related injury, relative to the performance of law enforcement duties” (Auqui, 22 NY3d at 256). Moreover, separate bodies are charged with determining entitlement to benefits under the Workers’ Compensation Law and General Municipal Law § 207-c, in proceedings involving “significantly distinct” burdens and procedures (id. at 256-257; accord Balcerak, 94 NY2d at 261). Indeed, we have repeatedly explained that, because “the issue involving the entitlement to benefits in the General Municipal Law setting is not . . . the same one decided in a Workers’ Compensation determination” (Balcerak, 94 NY2d at 261), a finding by the Workers’ Compensation Board that an injury is work-related cannot be given collateral estoppel effect against a municipality that denies an application for section 207-c benefits (see Auqui, 22 NY3d at 256-257; Theroux, 1 NY3d at 242; Balcerak, 94 NY2d at 256-257).

Therefore, we reject the City’s argument, also adopted by the dissent, that General Municipal Law § 207-c benefits can be equated to workers’ compensation benefits for purposes of interpreting the proviso contained in General Municipal Law § 205-e. The language of section 205-e prohibits only recipients of workers’ compensation benefits from commencing suit against their employers; it does not, by its terms, bar the commencement of suits by recipients of section 207-c benefits—which we have repeatedly recognized to be separate and distinct from workers’ compensation benefits. In fact, section 205-e states that the right contained therein is “[i]n addition to any other right of action or recovery under any other provision of law” (General Municipal Law § 205-e [1]). If the legislature had intended the proviso in section 205-e to extend to suits by recipients of section 207-c benefits, “it easily could have and surely would have written the statute to say so” (Theroux, 1 NY3d at 240). As we recently explained in interpreting section 205-e in Gammons v City of New York, we “cannot by implication supply in a statute a provision which it is reasonable to suppose the Legislature intended intentionally to omit because the failure of the Legislature to include a matter within the scope of an act may be construed as an indication that its exclusion was intended” (24 NY3d 562, 570 [2014] [internal quotation marks and citation omitted]; see McKinney’s Cons Laws of NY, Book 1, Statutes § 74). In other words, “[w]e may not create a limitation that the Legislature did not enact” (Theroux, 1 NY3d at 240).

I—I f—i

Extending the bar on suits by recipients of workers’ compensation benefits in General Municipal Law § 205-e to the recipients of section 207-c benefits—as the City and the dissent urge us to do—would not only be inconsistent with the language of section 205-e itself, it would also be contrary to a number of our prior cases acknowledging that the legislature’s purpose in enacting section 205-e and subsequently amending it was to “abrogate judicial decisions [of this Court] interpreting” the right provided in “General Municipal Law § 205-e restrictively” (Gammons v City of New York, 24 NY3d at 568; see Williams v City of New York, 2 NY3d 352, 363-364 [2004]; Giuffrida v Citibank Corp., 100 NY2d 72, 76-79 [2003]; Gonzalez v Iocovello, 93 NY2d 539, 548-549 [1999]; Schiavone v City of New York, 92 NY2d 308, 313 [1998]). “General Municipal Law § 205-e was originally enacted in 1989 for the express purpose of ‘mitigating] the effect of the common law “fireman’s rule” ’ as applied to police officers” (Schiavone, 92 NY2d at 313, quoting Mem of State Exec Dept, L 1989, ch 346, 1989 McKinney’s Session Laws of NY at 2140). Section 205-e “conferred on police officers the same benefits that section 205-a [had been enacted to] offer[ ] firefighters, namely, a cause of action for line-of-duty injuries caused by statutory or regulatory violations” (Giuffrida, 100 NY2d at 77). Because “some courts initially held that section 205-e did not apply retroactively,” the statute was first amended in 1990 to “ ‘ensure that causes of action not time-barred or finally adjudicated can be brought under the new law’ ” (Schiavone, 92 NY2d at 313, quoting Mem of State Exec Dept, L 1990, ch 762, 1990 McKinney’s Session Laws of NY at 2494, 2495). The 1990 amendment also declared the statute to be remedial in nature (see id.).

In 1992, “the Legislature acted once again, this time in response to court decisions that restricted a police officer’s cause of action under General Municipal Law § 205-e to situations where the officer’s injuries resulted from ‘violations pertaining to the safe maintenance and control of premises’ ” (Giuffrida, 100 NY2d at 77, quoting L 1992, ch 474, § 1). That amendment clarified “that an officer would have a right of action for injuries sustained ‘in the discharge or performance at any time or place of any duty imposed [by law, etc.]’ ” (Schiavone, 92 NY2d at 314 [emphasis omitted], quoting General Municipal Law § 205-e [1]).

The final substantive amendment took place in 1996, again in response to court decisions that interpreted section 205-e restrictively. Specifically, the 1996 amendment added subdivision (3) to section 205-e “to permit liability even in cases where the injury is due to a violation of a codified common-law duty, constituting] another rejection of a judicial decision holding otherwise” (Gammons, 24 NY3d at 568-569; see Gonzalez, 93 NY2d at 549). In addition, the 1996 amendment provided that a claim lies under section 205-e even if the violation did not increase the dangers inherent in a police officer’s job (see Giuffrida, 100 NY2d at 78). That amendment was also accompanied by an express statement of “Legislative intent” indicating that it was

“intended to ensure once and for all that section 205-e of the [G]eneral [Mjunicipal [L]aw is applied by the courts in accordance with its original legislative intent to offer an umbrella of protection for police officers, who, in the course of their many and varied duties, are injured by the negligence of anyone who violates any relevant statute, ordinance, code, rule and/or regulation” (L 1996, ch 703, §1).

As we explained in Williams, this “series of amendments to section 205-e teaches us that we should apply this provision ‘expansively’ so as to favor recovery by police officers whenever possible” (2 NY3d at 364 [emphasis added]; see Gammons, 24 NY3d at 569).

Moreover, the same 1996 enactment that amended General Municipal Law § 205-e also created General Obligations Law § 11-106, which “created a distinct right of action for police officers and firefighters injured by the negligence or intentional conduct of any person, except an employer or co-employee” (Gonzalez, 93 NY2d at 549), thereby largely abolishing the firefighter’s rule (see Giuffrida, 100 NY2d at 78), but maintaining the common-law bar on tort claims against employers and co-employees (see Williams, 2 NY3d at 363). This Court has long rejected the position of the dissent that the enactment of General Obligations Law § 11-106 evinced a legislative intent to prohibit tort claims against municipal employers; rather, we recognized shortly after that provision was enacted that the legislative history of the 1996 amendment made clear “that the employer exemption in General Obligations Law § 11-106 should not be incorporated into ‘the unambiguous terms’ of General Municipal Law § 205-e” (Gonzalez, 93 NY2d at 549 [emphasis added], quoting Sponsor’s Mem in Support, Bill Jacket, L 1996, ch 703 at 8, 1996 NY Legis Ann at 529). Subsequently, we explained that “while a police officer can assert a common-law tort claim against the general public, liability against a fellow officer or employer can only be based on the statutory right of action in General Municipal Law § 205-e” (Williams, 2 NY3d at 363). Particularly because a police officer’s right to sue his or her employer is now derived solely from section 205-e, adoption of the City’s restrictive interpretation of the statute would contravene the well-settled canon of statutory construction that remedial statutes—such as section 205-e (see Schiavone, 92 NY2d at 313)—“should be construed broadly so as to effectuate their purpose” (Matter of Scanlan v Buffalo Pub. School Sys., 90 NY2d 662, 676 [1997]).

Finally, the City’s construction of the statute is inconsistent with the legislative history of the 1996 amendment, which reveals that the New York State Conference of Mayors and Municipal Officials, as well as the Mayors of New York City and Rochester individually, specifically objected to the bill based upon their recognition that General Municipal Law § 205-e, as amended, would permit police officers to sue their employers despite receiving generous benefits under section 207-c, thereby greatly expanding the liability of cities such as Buffalo that do not provide workers’ compensation benefits for their police officers (see Letter from Edward C. Farrell, July 10, 1996, Bill Jacket, L 1996, ch 703 at 28-29; Letter from William A. Johnson, Jr., Oct. 8, 1996, Bill Jacket, L 1996, ch 703 at 48; Letter from Rudolph W. Giuliani, July 8, 1996, Bill Jacket, L 1996, ch 703 at 33). In signing the bill, however, Governor Pataki observed that those municipalities, “by not providing workers’ compensation [,] . . . have avoided and will continue to avoid substantial costs” (Governor’s Approval Mem, Bill Jacket, L 1996, ch 703 at 13, 1996 NY Legis Ann at 532). In other words, the legislative history demonstrates that the Governor, the legislature and the affected municipalities were aware at the time of the enactment of the 1996 amendment that a municipality that does not provide workers’ compensation could be sued by police officers despite their receipt of section 207-c benefits.

IV.

In short, we conclude that General Municipal Law § 205-e, when construed “in an unforced and natural manner” (Theroux, 1 NY3d at 240), cannot be read to bar suits by recipients of General Municipal Law § 207-c benefits when those police officers are employed by municipalities that have elected not to provide workers’ compensation coverage. The contrary interpretation urged by the City and the dissent is inconsistent with the plain words of the statute, as well as the express statement of legislative intent and the legislative history of the statute. The City’s interpretation also conflicts with our prior decisions recognizing that the statute should be applied expansively and disregards the distinctions between workers’ compensation benefits and section 207-c benefits long recognized by this Court. Claimants’ remaining argument is unpreserved.

Accordingly, the order of the Appellate Division should be reversed, with costs, and the matter remitted to that court for consideration of issues raised but not determined on the appeal to that court.

Pigott, J.

(dissenting). Section 205-e of the General Municipal Law—the provision under which plaintiff seeks to impose liability against his municipal employer—was passed by the legislature in 1989 (see L 1989, ch 346, § 1). That section was enacted, in large part, in response to this Court’s decision in Santangelo v State of New York (71 NY2d 393 [1988]), where we held that on-duty police officers were not entitled to recover for injuries sustained in the line of duty as a result of the negligence of third parties (see Senate Introducer’s Mem in Support, Bill Jacket, L 1989, ch 346 at 5, 1989 NY Legis Ann at 180; see also Letter from Dean G. Skelos to Executive Chamber, June 30, 1989, Bill Jacket, L 1989, ch 346 at 6). The statute provides that, so long as the injured officer could show that the third party failed to comply with the requirements of any statute, ordinance, rule or order of a government entity, the injured officer could bring a negligence cause of action against the third party.

When enacting section 205-e, the legislature recognized that permitting officers to bring negligence actions against third parties could result in fiscal savings to the municipal employer. Since the injured police officers (living in municipalities with a population of less than one million) were already entitled to receive their salaries and payment of their medical bills and hospital fees pursuant to General Municipal Law § 207-c, the municipality could now file a lien and recoup those costs from the third-party wrongdoer (see Senate Introducer’s Mem in Support, Bill Jacket, L 1989, ch 346 at 5, 1989 NY Legis Ann at 180).

Nowhere in the legislative history of the enactment of section 205-e did the legislature indicate that it intended for the injured employee to commence a lawsuit against the municipal employer providing section 207-c benefits. Indeed, appellate courts routinely recognized that section 207-c benefits were the injured police officer’s exclusive remedy against his or her municipal employer (see e.g. Nieves v City of Yonkers, 268 AD2d 412 [2d Dept 2000]; Damiani v City of Buffalo, 198 AD2d 814 [4th Dept 1993]).

While elected officials expressed a fear during debate concerning the 1996 amendments that section 205-e could be viewed as giving injured officers a viable cause of action against their municipal employer, the legislature made clear that the common-law bar on tort claims against municipal employers remained (see General Obligations Law § 11-106), thereby evidencing its continued intention to prohibit such suits. Further, the legislature did not alter the language of section 205-e in any way to indicate a change in the statute’s original intent, which was to provide municipal employers paying 207-c benefits a fiscal savings, not subject them to liability. In the more than 25 years since the enactment of 205-e, an injured police officer suing his or her municipal employer has remained anathema.

The majority spends much of its time distinguishing workers’ compensation from section 207-c benefits. But that analysis begs the question: Why would an injured officer receiving section 207-c benefits, as opposed to workers’ compensation, be entitled to sue his or her employer? Indeed, this Court has recognized that section 207-c benefits are expansive (even more so than workers’ compensation benefits). Injured officers receive their full amount of regular salary or wages, and the municipality is “liable for all medical treatment and hospital care necessitated by the injury or illness,” which payments “continue [even] after the employee’s retirement, and are bestowed in addition to any retirement allowance or pension” (Matter of Theroux v Reilly, 1 NY3d 232, 239 [2003]). The fact that section 207-c provides different benefits than workers’ compensation, however, does not authorize an officer to bring a lawsuit against his or her municipal employer. The more expansive benefits available under section 207-c compels just the opposite conclusion.

The legislative history of section 205-e provides no explanation for the distinction the majority attempts to make between workers’ compensation and 207-c benefits because there is none. In my view, injured officers are no more entitled to commence an action against their municipal employer pursuant to section 205-e when they are receiving section 207-c benefits than if they were receiving benefits under workers’ compensation. Therefore, I dissent.

Chief Judge DiFiore and Judges Rivera, Abdus-Salaam, Fa-hey and Garcia concur; Judge Pigott dissents and votes to affirm in an opinion.

Order reversed, with costs, and matter remitted to the Appellate Division, Fourth Department, for consideration of the facts and issues raised but not determined on the appeal to that court.

      . Workers’ compensation benefits, where provided, are awarded “[i]n addition to General Municipal Law § 207-c (1) benefits” (Matter of Leone v Oneida County Sheriff's Dept., 80 NY2d 850, 851 [1992] [emphasis added]). Where a municipality provides its police officers with workers’ compensation benefits, the “municipality’s obligation to pay wages and medical costs under General Municipal Law ...[§] 207-c is in no way dependent upon any determination made by the” Workers’ Compensation Board, and a police officer is “not required to exhaust [his or] her administrative remedies in [a] workers’ compensation proceeding before pursuing” benefits under section 207-c (Matter of Davidson v LaGrange Fire Dist., 82 AD3d 1227, 1230 [2d Dept 2011]). In practice, when a police officer is awarded workers’ compensation benefits, those benefits may be made payable to the employer as a credit for section 207-c benefits already paid (see Matter of McCabe v Albany County Sheriff's Dept., 129 AD3d 1348, 1348 [3d Dept 2015]), if the award of workers’ compensation benefits would constitute a duplication of the payment of medical expenses or salary benefits awarded under section 207-c (cf. Leone, 80 NY2d at 852 [no credit for section 207-c benefits is allowed against a workers’ compensation schedule loss of use award because such award does not duplicate 207-c benefits]).

      . The Appellate Division decisions relied upon by the dissent ultimately flow from O’Dette v Parton (190 AD2d 1074 [4th Dept 1993]), which is inap-posite. In O’Dette, it was uncontroverted that the plaintiff was entitled to workers’ compensation benefits (see id. at 1075). To the extent that the Second and Fourth Departments routinely relied upon O’Dette for the proposition that entitlement to General Municipal Law § 207-c benefits for duty-related injuries bars a claim against an employer under section 205-e even where workers’ compensation benefits are unavailable, that reliance was misplaced.

      . Contrary to the dissent’s contention that suits by injured police officers against municipal employers have never been recognized in the 25 years since the enactment of General Municipal Law § 205-e, this Court expressly recognized as a general matter that such suits are permissible over a decade ago in Williams v City of New York (2 NY3d 352, 363 [2004]).

      . All municipalities except New York City are compelled to provide full salary and health care benefits to their firefighters and police officers injured while on duty pursuant to the General Municipal Law. Therefore, the legislature has chosen to treat New York City differently and there is no basis to compare General Municipal Law § 207-c to the rules pertaining to that municipality. Nor is there any basis to rely on prior precedent of this Court that involved injured police officers suing the City of New York under section 205-e to determine the issue at hand.

      . The majority notes our decision in Williams v City of New York (2 NY3d 352, 363 [2004]) for the proposition that this Court has recognized suits against municipal employers under section 205-e (see majority op at 240 n 3). Williams, however, involved lawsuits against the City of New York and did not involve injured police officers receiving section 207-c benefits.


source: Caselaw Access Project

author: Rivera, J.

license: Public Domain

text:
    [66 NE3d 1044, 44 NYS3d 326]
    In the Matter of County of Chemung, Respondent, v Nirav R. Shah, M.D., M.P.H., as Commissioner of the New York State Department of Health, et al., Appellants. In the Matter of County of St. Lawrence, Respondent, v Nirav R. Shah, M.D., M.P.H., as Commissioner of the New York State Department of Health, et al., Appellants. (And Two Other Related Proceedings.) In the Matter of County of Chautauqua, Appellant, v Nirav R. Shah, M.D., M.P.H., as Commissioner of the New York State Department of Health, et al., Respondents. In the Matter of County of Jefferson, Appellant, v Nirav R. Shah, M.D., M.P.H., as Commissioner of the New York State Department of Health, et al., Respondents. In the Matter of County of Oneida, Appellant, v Nirav R. Shah, M.D., M.P.H., as Commissioner of the New York State Department of Health, et al., Respondents. In the Matter of County of Genesee, Appellant, v Nirav R. Shah, M.D., M.P.H., as Commissioner of the New York State Department of Health, et al., Respondents. In the Matter of County of Cayuga, Appellant, v Nirav R. Shah, M.D., M.P.H., as Commissioner of the New York State Department of Health, et al., Respondents. In the Matter of County of Monroe, Appellant, v Nirav R. Shah, M.D., M.P.H., as Commissioner of the New York State Department of Health, et al., Respondents.
    Argued September 7, 2016;
    decided October 27, 2016

      POINTS OF COUNSEL

      Eric T. Schneiderman, Attorney General, Albany (Victor Paladino, Barbara D. Underwood and Andrew D. Bing of counsel), for appellants in the first and second above-entitled combined proceedings and actions and respondents in the second, third, fourth, fifth, sixth, seventh and eighth above-entitled combined proceedings and actions.

      Whiteman Osterman & Hanna LLP, Albany (Christopher E. Buckey and Robert S. Rosborough IV of counsel), and Nancy Rose Stormer, PC., Utica {Nancy Rose Stormer and Michael Bagge of counsel), for respondent in the first and second above-entitled combined proceedings and actions and appellant in the second, third, fourth, fifth, sixth, seventh and eighth above-entitled combined proceedings and actions, and Bond Schoe-neck & King, PLLC, Utica (.Raymond A. Meier of counsel), for appellant in the fifth and eighth above-entitled combined proceedings and actions.

      Zachary W. Carter, Corporation Counsel, New York City (Michael Pfautz, Michael Pastor, Richard Bearing, Devin Slack and Brian Horan of counsel), for City of New York, amicus curiae.

      Stephen J. Acquario, General Counsel, New York State Association of Counties, Albany and Friedman Kaplan Seiler & Adelman LLP, New York City CKatherine L. Pringle and Rebecca C. Serbin of counsel), for New York State Association of Counties, amicus curiae.
   OPINION OF THE COURT

Rivera, J.

In these appeals, several counties challenge the constitutionality of the 2012 amendment (L 2012, ch 56, § 1, part D, § 61) (section 61) to the Medicaid Cap Statute (L 2005, ch 58, § 1, part C, § 1), which closes the door on reimbursement claims for a category of Medicaid disability expenses paid by the counties to the State prior to 2006. The current appeals are the latest round in a decade-long struggle between the counties and the State, during which the counties demanded payment after the state legislature restructured the Medicaid local-share payment system, and enacted a flat cap on total county Medicaid expenses. We are now faced with divergent departmental approaches to the resolution of the singular question underlying these proceedings: whether the State must consider and pay claims submitted after the effective date of the legislative deadline for pre-2006 reimbursement claims set forth in section 61. We conclude section 61 is constitutional, and that the State is under no further obligation to address outstanding county reimbursement claims filed after April 1, 2012, nor must the State initiate an administrative review of its records to identify and pay for any pre-2006 claims.

L

Medicaid is a federal program that provides medical services to low-income individuals with limited resources (see generally Matter of Visiting Nurse Serv. of N.Y. Home Care v New York State Dept. of Health, 5 NY3d 499, 503 [2005]; 42 USC § 1395 et seq.). The program is jointly funded by the federal government and the states (42 USC §§ 1396a, 1396b). In New York, the program is administered through the State Department of Health (DOH), and the State pays for covered medical services and, in turn, is partially reimbursed a specified percentage for these expenses by the federal government (id.). Unreimbursed expenses are shared between the State and 58 local social services districts, which are coterminous with the State’s counties (Social Services Law § 368-a [1] [d]).

From 1984 until 2006 the State directly billed the counties for their respective local shares, which included costs for a category of medical services for certain Medicaid recipients for which the counties bore no financial responsibility, and for which they were entitled to repayment, known as “overburden reimbursements” (Social Services Law § 368-a [1] [h]). The State deposited the local share in a special escrow Medicaid fund maintained by the State Comptroller (Social Services Law § 367-b [14]). As required by Social Services Law § 368-a (1) (h) (i), upon review by DOH of the local share, the State was obligated to pay the county 100% of Medicaid services provided to recipients who were eligible for overburden reimbursement.

From 1984 to 2005, the State met its obligation to pay overburden reimbursements in two ways. First, DOH identified overburden reimbursement-eligible patients and paid the counties quarterly. Second, DOH instituted a process whereby counties could submit reimbursement claims for eligible patients overlooked by DOH (18 NYCRR 601.4; part 635). To assist with the claims process, DOH would send each county several reports that included the client identification number of each patient for which the county was entitled to reimbursement, the amount the county had originally paid for that patient’s Medicaid expenditures, and the reimbursement amount. The State also made the adjudicated claims history file available to the counties, and it included details from 1984 onward regarding all Medicaid claims that DOH’s fiscal agent paid for services provided to Medicaid recipients. Any county that believed it was owed a reimbursement based on its review of these reports could notify DOH in writing by letter or upon submission of a claim in accordance with DOH regulations.

In response to rising Medicaid costs and the fiscal burdens they imposed on the counties, in 2005 the legislature enacted the Medicaid Cap Statute (Cap Statute) to limit the counties’ financial responsibility for Medicaid expenditures. The Cap Statute replaced the counties’ fixed percentage of Medicaid expenses (for example, roughly .25%), with a maximum individualized county cap, based on the Medicaid expenditures made by or on behalf of each county during the 2005 base year, after deducting any overburden reimbursement payments made to the county.

Thereafter, DOH interpreted the Cap Statute as imposing a specific annual contribution amount on the counties that they could not reduce by seeking payment for outstanding overburden reimbursements, and DOH denied overburden reimbursement claims submitted after the enactment of the Cap Statute. Niagara, Herkimer, and St. Lawrence Counties each brought CPLR article 78 proceedings challenging the denials. Supreme Court granted the Counties partial relief and, when DOH appealed, the Appellate Division held that DOH’s application of the Medicaid Cap Statute to the Counties’ claims “constituted an impermissible retroactive application of the statute” (Matter of County of St. Lawrence v Daines, 81 AD3d 212, 214 [3d Dept 2011], lv denied 17 NY3d 703 [2011]; see also Matter of County of Herkimer v Daines, 60 AD3d 1456, 1457 [4th Dept 2009], lv denied 13 NY3d 707 [2009]; Matter of County of Niagara v Daines, 60 AD3d 1460, 1461 [4th Dept 2009], lv denied 13 NY3d 708 [2009]).

On the heels of the Counties’ success in the courts, the legislature enacted an amendment in 2010 that DOH interpreted as barring the Counties from seeking past overburden reimbursements. Another round of litigation ensued, and the Appellate Division ultimately rejected the State’s statutory construction and annulled DOH’s denials of overburden claims, concluding that the 2010 amendment did not clearly and unambiguously extinguish the State’s obligation to pay the pre-2006 claims (see Matter of County of St. Lawrence v Shah, 95 AD3d 1548, 1548, 1551-1553 [3d Dept 2012]; Matter of County of Niagara v Daines, 91 AD3d 1288, 1290 [4th Dept 2012], lv denied 94 AD3d 1481 [2012]).

While these appeals were pending, the legislature enacted section 61 as part of the 2012-2013 executive budget, which expressly provides that “ [notwithstanding the provisions of section 368-a of the social services law or any other contrary provision of law, no reimbursement shall be made for social services districts’ claims submitted on and after the effective date of this paragraph, for district expenditures incurred prior to January 1, 2006” (L 2012, ch 56, § 1, part D, § 61). Section 61, which was proposed on January 17, 2012 and passed on March 30, 2012, had an effective date of April 1, 2012. According to the State Executive Budget Memorandum, section 61 was intended:

“to clarify that local governments cannot claim for overburden expenses incurred prior to January 1, 2006, when the ‘local cap’ statute that limited local contributions to Medicaid expenditures took effect. This is necessary to address adverse court decisions that have resulted in State costs paid to local districts for pre-cap periods, which conflict with the original intent of the local cap statute.” (Mem in Support, 2012-13 NY State Executive Budget, Health and Mental Hygiene Article VII Legislation at 18.)

When the 2012 amendment was passed, overburden claims could be up to 28 years old.

Shortly before the April 1st effective date, St. Lawrence and Chemung Counties submitted claims for millions of dollars of pre-2006 overburden reimbursements. DOH paid these claims in 2012 but rejected claims from several upstate counties, including additional claims from St. Lawrence and Chemung Counties submitted after April 1, 2012.

St. Lawrence County commenced three combined CPLR article 78 proceedings and actions for declaratory judgment (for each claim rejected by DOH). The County sought to annul DOH’s decision to deny reimbursement for claims submitted after April 1, 2012 as arbitrary and capricious and to compel DOH to approve and pay the claims. It further requested that the court declare section 61 unconstitutional for depriving the County of its vested property rights, and impose a constructive trust over the funds that DOH was allegedly obligated to reimburse. DOH moved and the County cross-moved for summary judgment on the declaratory judgment and state law claim. Supreme Court concluded that the County had a vested right to reimbursement for the overburden expenditures which could not be extinguished. It declared section 61 unconstitutional, annulled DOH’s denials of the County’s claims, and directed DOH to pay the claims submitted by the County (Matter of County of St. Lawrence v Shah, Sup Ct, St. Lawrence County, July 31, 2013, Demarest, J., index No. 140712). Supreme Court also granted the County’s request for mandamus relief and held that DOH has a unilateral obligation to calculate and reimburse the County for the pre-2006 overburden expenditures.

The Third Department modified Supreme Court’s order, and held section 61 constitutional, construing it as a statute of limitations that did not extinguish the counties’ substantive rights but merely ended the time for submission of their claims. As a matter of procedural due process, the Court imposed a six-month grace period from the date of its decision for submission of the counties’ pre-2006 claims (Matter of County of St. Lawrence v Shah, 124 AD3d 88, 92-93 [3d Dept 2014]). The Court also upheld the grant of mandamus relief, which required DOH to identify, verify and pay all overburden expenditures incurred by the County before 2006 (id. at 94).

In the summer of 2013, Chemung County commenced a combined CPLR article 78 proceeding and action for declaratory judgment seeking similar relief to that sought in the St. Lawrence litigation. Supreme Court held in Chemung County’s favor on the reasoning of the decision in the St. Lawrence proceedings. On appeal, the Third Department applied its St. Lawrence decision and reached the same conclusion (Matter of County of Chemung v Shah, 124 AD3d 963 [3d Dept 2015]).

Shortly before the decision in St. Lawrence, the Fourth Department held in an article 78 proceeding and declaratory judgment action commenced by Niagara County that section 61 applies retroactively to extinguish the pre-2006 overburden claims. However, the Court remitted for consideration of any properly alleged State challenges to the County’s argument that section 61 violated due process by extinguishing its vested rights in the claims (Matter of County of Niagara v Shah, 122 AD3d 1240 [4th Dept 2014]).

Before a decision was rendered on that issue in the Niagara County litigation, and in nearly identical actions commenced by Chautauqua County and Jefferson County, the Fourth Department held that the State waived its defense that the Counties lacked capacity to assert constitutional challenges against the State and state legislation. However, the Court determined that the Counties were not persons within the meaning of the Due Process Clauses of the Federal and State Constitutions, and therefore failed to establish the unconstitutionality of section 61 (Matter of County of Chautauqua v Shah, 126 AD3d 1317 [4th Dept 2015]; Matter of County of Jefferson v Shah, 126 AD3d 1322 [4th Dept 2015]; Matter of County of Oneida v Shah, 128 AD3d 1381 [4th Dept 2015]; Matter of County of Genesee v Shah, 128 AD3d 1380 [4th Dept 2015]; Matter of County of Cayuga v Shah, 129 AD3d 1503 [4th Dept 2015]; Matter of County of Monroe v Shah, 129 AD3d 1505 [4th Dept 2015]). Those Counties appealed to this Court.

We granted the State leave to appeal in Matter of County of Chemung v Shah (124 AD3d 963 [3d Dept 2015]) and County of St. Lawrence (124 AD3d 88 [3d Dept 2014]) to resolve the divergence and apparent conflict in the Appellate Division (Matter of County of Chemung v Shah, 25 NY3d 903 [2015]; Matter of County of St. Lawrence v Shah, 25 NY3d 903 [2015]).

H

On appeal to us, the Counties assert that they possess constitutionally protected vested rights in the unpaid funds which cannot be extinguished by retroactive application of section 61 without violating their due process rights. Under this interpretation of the statutory scheme, the Counties have no burden to demand payment and the State must pay any overburden reimbursements due under Social Services Law § 368-a (1) (h) (i), regardless of whether the Counties submitted claims before April 1, 2012, or at any time thereafter. This would mean that the State has an ongoing obligation, terminated only by payment of outstanding reimbursements, irrespective of the age of the claim.

Alternatively, the Counties argue section 61 may be interpreted to avoid any constitutional deficiencies as a statute of limitations that sets a deadline for the submission of claims without extinguishing the Counties’ substantive rights, but that the deadline set forth in section 61 must be extended to provide an adequate period in which to submit their remaining claims. Lastly, the Counties argue that mandamus relief is not only appropriate but necessary to compel the State’s compliance with its statutory duty under Social Services Law § 368-a.

The State responds that the Counties fail to present a viable due process challenge to the constitutionality of section 61. The State argues the Counties are neither “persons” guaranteed due process in the constitutional sense, nor are they holders of any rights in a particular form of Medicaid allocation. Regardless, according to the State, the Counties have not been unfairly harmed by its decision to replace one Medicaid expense repayment system with another because the Cap Statute provides greater financial benefits to the counties. The State maintains that the legislature responded to the rapidly increasing Medicaid costs with a ceiling on the counties’ financial exposure, essentially providing them with a fixed dollar amount rather than a fixed, percentage of overall costs. Under the Cap Statute, the total amount the counties could pay was limited, but part of this legislative “deal” was that the counties would be required to pay their full cap amount each year, without any credit for reimbursements owed. The State also claims that the Counties lack a clear legal right to the mandamus relief granted here, specifically a massive, retrospective review by the State of 22 years of Medicaid expenditures.

The litigation posture of these appeals presents insurmountable obstacles to our consideration of some of the State’s objections to the Counties’ ability to pursue its challenge to section 61. As the State concedes, it waived any argument that the Counties are without capacity to sue the State under the general rule that municipalities are “creatures or agents of the State,” without authority to “contest the actions of their principal or creator affecting them in their governmental capacity or as representatives of their inhabitants” (City of New York v State of New York, 86 NY2d 286, 290 [1995]; see also Williams v Mayor of Baltimore, 289 US 36, 40 [1933]). The State’s waiver encompasses any challenge to the Counties’ argument that they hold a proprietary interest in the overburden reimbursements (see City of New York, 86 NY2d at 291-292). The State also failed to preserve its argument that the Counties lack a substantive due process right to the monies they now claim because the municipalities are not persons within the meaning of the Federal and State Due Process Clauses.

We now turn to the merits of the Counties’ challenge to the State’s interpretation of section 61. Five principles guide our analysis. First, “[i]t is well settled that acts of the Legislature are entitled to a strong presumption of constitutionality” (Cohen v Cuomo, 19 NY3d 196, 201 [2012]). This presumption can only be overcome when it can be shown beyond a reasonable doubt that it conflicts with a fundamental law, and “until every reasonable mode of reconciliation of the statute with the Constitution has been resorted to, and reconciliation has been found impossible” (Matter of Fay, 291 NY 198, 207 [1943]). Second, “statutes relating to the same subject matter . . . must be read together and applied harmoniously and consistently” (Alweis v Evans, 69 NY2d 199, 204 [1987]). Third, we aim to effectuate the intent of the legislature, and the clearest indicator of legislative intent is the plain meaning of the statutory language (Majewski v Broadalbin-Perth Cent. School Dist., 91 NY2d 577, 583 [1998]). Fourth, any claim can be time-barred, including constitutional claims (Block v North Dakota ex rel. Board of Univ. and School Lands, 461 US 273, 292 [1983]). Fifth, extensive arguments about a cost allocation scheme’s economic and political wisdom is outside the scope of judicial review (Matter of Jeter v Ellenville Cent. School Dist., 41 NY2d 283, 287 [1977]). As the Supreme Court has held,

“[w]hether the enactment is wise or unwise, whether it is based on sound economic theory, whether it is the best means to achieve the desired result, whether, in short, the legislative discretion within its prescribed limits should be exercised in a particular manner, are matters for the judgment of the legislature, and the earnest conflict of serious opinion does not suffice to bring them within the range of judicial cognizance.” (Chicago, B. & Q. R. Co. v McGuire, 219 US 549, 569 [1911].)

In other words, the counties cannot challenge the State’s decision to prospectively reallocate Medicaid payments.

With these principles in mind, we are able to resolve these appeals without deciding between the parties’ competing positions as to whether section 61 extinguishes substantive claims, or merely sets forth the outer temporal limit during which counties may challenge the State’s initial overburden payment determination to seek additional reimbursement. If we assume, arguendo, that the counties have a vested right to any reimbursements that accrued before 2006, then under any possible theory presented in these appeals, section 61 is constitutional.

By its express language that “no reimbursement shall be made for social services districts’ claims submitted on and after the effective date of this paragraph, for district expenditures incurred prior to January 1, 2006,” section 61 terminates the submission of pre-2006 claims past its effective date. This legislatively-mandated cutoff date was a response to judicial misinterpretations of prior statutory efforts to end the claims process which was administratively instituted by DOH under the State’s former Medicaid allocation regime (Mem in Support, 2012-13 NY State Executive Budget, Health and Mental Hygiene Article VII Legislation at 18 [section 61 necessary to address adverse court decisions that conflict with statute’s original intent]). Once the State complied with its statutory obligation under Social Services Law § 368-a (1) (h) (i) to pay the counties for overburden reimbursements, it was fully consistent with the prior mandatory reimbursement scheme for the legislature to impose a deadline on claims for unpaid funds. That deadline was neither in conflict with a fundamental law nor our constitutional principles. Just as the Counties cannot be heard to complain that the legislature replaced one Medicaid allocation scheme with another, thus redefining the counties’ expense burden, so too are the counties without recourse when the legislature imposes a deadline on the counties’ submission of claims for overburden reimbursements, thereby closing the door on pre-2006 claims.

There is also no merit to the Counties’ claim that procedural due process mandates that section 61 be extended beyond its effective date in order to protect their vested rights in any unpaid funds. It is well established that procedural due process guarantees notice and an opportunity to be heard before a claimant is deprived of liberty or a recognized property interest (Matter of Quinton A., 49 NY2d 328, 334 [1980]). “[N]o one rule as to the length of time which will be deemed reasonable can be laid down for the government of all cases alike. Different circumstances will often require a different rule. What would be reasonable in one class of cases would be entirely unreasonable in another” (McGahey v Virginia, 135 US 662, 707 [1890]). The question distills to what is reasonable under the circumstances (Terry v Anderson, 95 US 628, 633 [1877]). In deciding the Counties’ argument for additional time to submit claims, our analysis focuses on the overburden reimbursement claims process, the litigation following the enactment of the Cap Statute, and the question of whether the counties have been denied the opportunity to pursue claims before enactment of the statutory prohibition on submissions.

As the record establishes, as far back as 1988 the counties were on notice under Social Services Law § 368-a (1) (h) (i) and the State’s regulations that the State was obliged to pay overburden reimbursements, and that the counties could pursue claims for any amounts they believed they were still owed after payment. The counties had information available to pursue those claims in the decades leading up to the passage of section 61. For years, the counties knew on a weekly basis the amount the State was taking to satisfy the counties’ local share of Medicaid expenses, and the State provided the counties with quarterly reports and other documents by which the counties could determine if they had a potential claim. Only after the enactment of the Cap Statute, and in reliance on its interpretation that the legislature thereby set for the counties a fixed, non-reducible maximum payment, did the State categorically reject claims submitted after 2006. The dispute over these claims spawned close to a decade of litigation in the Appellate Division, involved numerous counties, and resulted in the eventual payment of all outstanding claims. Armed with the success of this litigation, while still aware of the State’s continued efforts to close the door on pre-2006 claims, the counties continued to submit more claims as the effective date of section 61 approached. Given this history, we cannot say that the counties did not have notice of the claims process or an opportunity to seek reimbursement for claims, including those going back over 20 years.

Moreover, as the Counties recognize, they have no claim to the continuation of the former overburden reimbursement system in perpetuity because the State acted well within its authority to reallocate Medicaid spending under a new legislative framework, as it did with the passage of the Cap Statute (L 2005, ch 58, § 1, part C, § 1, as amended by L 2006, ch 57, § 1, part A, § 60). Notably, the Cap Statute provides significant financial benefit to the counties, and does not place them in a demonstrably worse position than under the overburden reimbursement claims process. As the State contends, and the Counties do not dispute, the counties saved billions of dollars in the years following the enactment of the Cap Statute.

Our analysis must also give weight to the judgment of the legislature that claims should be extinguished with the enactment of the budget on April 1, 2012 (Terry, 95 US at 633). As the State argues, this deadline furthers the State’s significant interest in the stability of its finances and the budgeting process.

Under the unique circumstances of this case we do not consider the deadline set by the legislature repugnant to due process. Therefore, there is no basis to extend the time for submission of pre-2006 claims beyond the years previously available to the counties and the date set forth in section 61.

I—I HH I—I

We also conclude that mandamus relief is unwarranted. This Court has repeatedly stated that mandamus is an “extraordinary remedy” that is “available only in limited circumstances” (Klostermann v Cuomo, 61 NY2d 525, 537 [1984]). “Mandamus is used to enforce an administrative act positively required to be done by a provision of law” (Matter of Walsh v LaGuardia, 269 NY 437, 441 [1936]). It is considered extraordinary because the judiciary is loathe to interfere with the executive department’s exercise of its official duties, unless the department has failed to perform a specific act (id.). Here, DOH made its initial determinations and reimbursed counties quarterly, and then paid out all claims submitted prior to the April 1, 2012 deadline. The Social Services Law requires no more and the Counties are not entitled to this relief. Moreover, ordering mandamus is inconsistent with our conclusion that section 61 is constitutional.

TV.

Accordingly, in Matter of County of Chemung and Matter of County of St. Lawrence, the orders insofar as appealed from should be reversed, without costs, the petitions dismissed in their entirety and a declaration made in favor of respondents Nirav R. Shah, M.D., M.P.H., as Commissioner of the New York State Department of Health, et al., that section 61 of part D of section 1 of chapter 56 of the Laws of 2012 has not been shown to be unconstitutional; in Matter of County of Chautauqua, Matter of County of Jefferson, Matter of County of Oneida, Matter of County of Genesee, Matter of County of Cayuga, and Matter of County of Monroe, the orders insofar as appealed from should be affirmed, without costs.

Garcia, J. (concurring). While I am in general agreement with the result arrived at by the majority, I reach that conclusion by a somewhat different analysis that I believe is more in line with the unique facts and procedural issues we confront here.

These cases present the conflicting interpretations of section 61 (L 2012, ch 56, § 1, part D, § 61) by the Third and Fourth Departments. The Third Department held that section 61 did not retroactively extinguish the counties’ right to reimbursement for certain Medicaid overpayments—or “overburden expenditures”—under Social Services Law § 368-a (1) (h) and instead that Court treated section 61 as a statute of limitations on the payment of claims for pre-2006 reimbursement (see Matter of County of St. Lawrence v Shah, 124 AD3d 88 [3d Dept 2014]). In light of this interpretation, the Third Department imposed a six-month grace period for the submission of reimbursement claims and granted mandamus relief requiring the Department of Health to identify, calculate, and pay outstanding overburden expenditures. Conversely, the Fourth Department held that section 61 unequivocally extinguished the counties’ right to pre-2006 reimbursement but later held that the counties could not challenge this action on due process grounds, despite the New York State Department of Health’s (DOH) waiver of the capacity defense, because they lack the “personhood” necessary to do so (see Matter of County of Niagara v Shah, 122 AD3d 1240 [4th Dept 2014]; Matter of County of Chautauqua v Shah, 126 AD3d 1317 [4th Dept 2015]). I would reject the Third Department’s interpretation of section 61 as a statute of limitations, adopt the Fourth Department’s interpretation of the statute but reject its person-hood analysis, and hold that the statute is constitutional under a vested due process rights analysis.

With respect to the Fourth Department’s determination that section 61 extinguishes the counties’ right to reimbursement, I agree that section 61 evinces a clear intent to foreclose any pre-2006 reimbursement claim. The language explicitly states that the statute is being enacted “notwithstanding” Social Services Law § 368-a (1) (h). As a result, “no reimbursement shall be made for social services districts’ claims submitted on and after [the amendment’s effective date], for district expenditures incurred prior to January 1, 2006 [including overburden expenditures]” (L 2012, ch 56, § 1, part D, § 61).

This interpretation of the plain language of the statute is likewise supported by the tortured litigation history that led to its enactment. The legislature first enacted the Medicaid Cap Statute (Cap Statute) in 2005 (L 2005, ch 58, § 1, part C, § 1), and litigation ensued following its passage. After courts determined that the Cap Statute did not extinguish the counties’ right to reimbursements, the legislature passed an amendment in 2010 stating that “the state/local social services district relative percentages of the non-federal share of medical assistance expenditures incurred prior to January 1, 2006 shall not be subject to adjustment on and after July 1, 2006” (L 2010, ch 109, § 1, part B, § 24). DOH’s interpretation of this amendment as barring the counties’ right to pre-2006 overburden reimbursements led to a new round of litigation, again resulting in opinions holding that the amendment did not extinguish DOH’s obligation to pay these reimbursement claims. This litigation history prompted the passage of section 61. Clearly, the legislature was not imposing a new time limit for filing claims: the intent was to extinguish those claims and end this process.

Where the language of a statute directs us to ignore a specific prior statute in addition to “any other contrary provision of law,” it is unnecessary to “harmonize” the two statutes. Accordingly, the Third Department’s interpretation of section 61 as a statute of limitations was error. Nor is such a reading warranted to make the statute constitutional because, for the reasons discussed below, section 61 is constitutional under a vested due process rights analysis.

Turning to the issue of whether in extinguishing the claims the legislature violated due process, it is necessary to address the threshold issue of capacity of the counties to bring this suit. New York strictly adheres to the rule that “municipalities lack the capacity to bring suit to invalidate State legislation” (City of New York v State of New York, 86 NY2d 286, 290 [1995]). Nor is it at all clear that plaintiffs here would have fit their claims within one of the narrow exceptions to that general rule, such as proprietary interest in a specific fund of moneys (id. at 291-292). Nevertheless, capacity, a waivable defense, was concededly waived here (see City of New York, 86 NY2d at 292). 1 would reject the Fourth Department’s interpretation of our case law as requiring the demonstration of an additional, undefined “personhood” requirement as a prerequisite to sue on due process grounds. The only support given for this interpretation is the reference to a “substantive right” to raise constitutional matters in Matter of Jeter v Ellenville Cent. School Dist. (41 NY2d 283, 287 [1977]), but a fair reading of that case demonstrates that the concern was capacity, not “personhood.” As a result, we can assume under the unique facts of this case that the counties had a vested property right in the refund of money spent to cover costs properly allocated to the State (see Alliance of Am. Insurers v Chu, 77 NY2d 573, 585-586 [1991]).

The waiver of the capacity defense and the determination that there is no additional personhood requirement, and an assumption that a vested property right exists in refunds owed, makes necessary a vested due process rights analysis to determine whether section 61 is constitutional. This straightforward analysis examines “fairness to the parties, reliance on pre-existing law, the extent of retroactivity and the nature of the public interest to be served by the law” (Alliance of Am. Insurers, 77 NY2d at 586).

I would uphold the statute’s constitutionality on the basis of such an analysis. The new payment system of section 61 provides some financial benefit to the counties in exchange for extinguishing the prior claims and in this way treats the counties fairly. The fact that those counties might disagree with the financial calculation is immaterial. Moreover, the economic or political wisdom of that calculation is beyond our review (see Jeter, 41 NY2d at 287). The counties had no right to rely on the preexisting payment system. Since the Cap Statute was enacted in 2005, the counties were on notice of changes in the reimbursement regime, and years of litigation and failed statutory amendments demonstrated DOH’s plain intent to extinguish pre-2006 reimbursement claims. The statute is minimally retroactive, applying only to those pre-2006 claims that were not brought by 2012. Moreover, section 61 serves the public interest in overhauling a system fraught with error and inefficiencies that still saw uncertainty with respect to the amount of outstanding claims—some potentially going back decades.

Enactment of section 61 extinguishing the counties’ pre-2006 claims was not unconstitutional. Because there is no need to read in any “statute of limitations,” there is also no need to provide a grace period or grant mandamus relief. Accordingly, I agree with the Fourth Department’s interpretation of section 61 as extinguishing the counties’ right to pre-2006 reimbursement, and hold that there was no due process violation in that legislative action.

In Matter of County of Chemung v Shah: Order, insofar as appealed from, reversed, without costs, petition dismissed in its entirety and a declaration made in favor of respondents Nirav R. Shah, M.D., M.P.H., as Commissioner of the New York State Department of Health, et al., that section 61 of part D of section 1 of chapter 56 of the Laws of 2012 has not been shown to be unconstitutional.

Opinion by Judge Rivera. Chief Judge DiFiore and Judges Pigott and Abdus-Salaam concur. Judge Garcia concurs in result in a separate concurring opinion. Judges Stein and Fahey taking no part.

In Matter of County of St. Lawrence v Shah: Order, insofar as appealed from, reversed, without costs, petitions dismissed in their entirety and a declaration made in favor of respondents Nirav R. Shah, M.D., M.P.H., as Commissioner of the New York State Department of Health, et al., that section 61 of part D of section 1 of chapter 56 of the Laws of 2012 has not been shown to be unconstitutional.

Opinion by Judge Rivera. Chief Judge DiFiore and Judges Pigott and Abdus-Salaam concur. Judge Garcia concurs in result in a separate concurring opinion. Judges Stein and Fahey taking no part.

In Matter of County of Chautauqua v Shah, Matter of County of Jefferson v Shah, Matter of County of Oneida v Shah, Matter of County of Genesee v Shah, Matter of County of Cayuga v Shah and Matter of County of Monroe v Shah: Order, insofar as appealed from, affirmed, without costs.

Opinion by Judge Rivera. Chief Judge DiFiore and Judges Pigott and Abdus-Salaam concur. Judge Garcia concurs in result in a separate concurring opinion. Judges Stein and Fahey taking no part.

      . The exception is New York City, whose five counties are constituted as a single social service district (Social Services Law § 61).

      . The Department of Health:
      “shall review the expenditures made by social services districts for medical assistance for needy persons, and the administration thereof, before making reimbursement. . . . If approved by the [DOH], such expenditures . . . shall be subject to reimbursement by the state in accordance with this section and the regulations of the [DOH] as follows: . . .
      “(h) (i) Beginning January first, [1984], one hundred per centum of the amount expended for medical assistance for those individuals who are eligible ... as a result of a mental disability as determined by [state officials] after first deducting therefrom any federal funds properly received or to be received on account thereof” (Social Services Law § 368-a [1] [h] [i]).

      . The Counties’ reliance on Brothers v Florence (95 NY2d 290 [2000]) in support of their request for a “grace period” beyond the legislative deadline is misplaced. Even treating section 61 as a statute of limitations, the appeals before us require that we consider the history and relationship between the Counties and the State. Unlike the potential claimants in Brothers, the Counties have twice avoided legislative attempts to end the submissions process, and by the State’s undisputed estimate, the Counties have already been paid approximately 98% of their claims. Therefore, the Counties’ demand for more time is not supported here.

      . It is unclear what the majority means in casting these decisions as “judicial misinterpretations” (majority op at 263); none of the relevant lower court decisions were reviewed by this Court (see e.g. Matter of County of Herkimer v Daines, 60 AD3d 1456 [4th Dept 2009], lv denied 13 NY3d 708 [2009]; Matter of County of St. Lawrence v Daines, 81 AD3d 212, 214-216 [3d Dept 2011], lv denied 17 NY3d 703 [2011]).

      . The majority’s conclusion that the State waived any challenge to the counties’ argument that they fit within an exception to the capacity defense misses the point (majority op at 262). The State has forfeited the right to assert that the counties lack the capacity to sue the State. The counties still need to demonstrate some form of due process interest requiring constitutional protection; however, it need not be the narrow “proprietary interest” necessary to overcome a properly asserted capacity defense.


author: Abdus-Salaam, J.

text:
    [66 NE3d 1057, 44 NYS3d 339]
    The People of the State of New York, Respondent, v Timothy Brewer, Appellant.
    Argued October 18, 2016;
    decided November 17, 2016

      POINTS OF COUNSEL

      Easton Thompson Kasperek Shiffrin LLP, Rochester {Brian Shiffrin of counsel), and Timothy P. Donaher, Public Defender, Rochester, for appellant.

      Sandra Doorley, District Attorney, Rochester {Robert J. Shoemaker of counsel), for respondent.
   OPINION OF THE COURT

Abdus-Salaam, J.

In this case involving the defendant’s sexual abuse of two minor girls, we must decide whether the trial court abused its discretion as a matter of law by allowing the People to elicit evidence of the distinctive manner in which he engaged in sexual acts with consenting adult women. We conclude that the trial court did not err in admitting this evidence, which corroborated the testimony of the two minor victims, because it was relevant and highly probative, and its probative value was not outweighed by the potential for prejudice.

L

Factual Background

The two victims in this case are sisters. When MD was nine and OD was seven, they lived in Rochester with their mother and defendant. Though defendant, who was their mother’s boyfriend, was not their biological father, they called him “dad.” At the time they lived there, defendant, their mother, and numerous other adults used the house to use and sell drugs and engage in sexual acts. Most often, these activities took place in a closet defendant called the “bat cave.”

MD and OD each described being sexually abused by defendant, and the particular method he used: he pulled them into a closet or back bedroom and forced them to perform oral sex on him, while he smoked crack with his shirt pulled over his head. After one of these incidents, MD left defendant and immediately disclosed to her mother what had happened. The mother gathered up MD, OD, and the rest of her children and moved out of the house.

At issue here is the evidence the People sought to introduce on their direct case pursuant to what they delineated as a pretrial Molineux application. The prosecutor wanted to elicit that the abuse of the girls had started before they moved to Rochester; that defendant frequently beat them with a belt; that defendant rented out the “bat cave” to others in the neighborhood to use as a space for drug use and sex; that when the police arrested defendant in the house, pursuant to a search warrant, they recovered crack cocaine; and, most relevant here, that defendant was a habitual crack user and engaged in oral sex with the girls’ mother and other consenting adult women in the exact same manner as he had forced the girls to: in a closet, with his shirt pulled over his head, while smoking crack. The People planned to introduce this evidence about defendant’s sexual habit through direct testimony from their mother. In their written application, the People argued that the proffered evidence would aid the jury in understanding the unique dynamics of the particular household and family, and in making credibility determinations.

The trial court heard argument on the applications and refused to allow evidence of the beatings with the belt, the renting out of the closet, and the recovery of drugs during the execution of the search warrant. With respect to defendant’s consensual oral sex with adult women in the bat cave while smoking crack, defense counsel argued that the drug use and the sexual acts were “clearly prejudicial and not probative enough for [the] Court to exercise its discretion and allow that testimony.” The People argued, in addition to the reasons stated in their written application, that the evidence was relevant because it demonstrated a pattern of behavior. The court ruled that the People could elicit testimony from the mother about her own observations and experiences with defendant, but limited the testimony about other adult women to those for which she was able to provide names and dates, and had personally observed engaging in sexual acts with defendant. After hearing testimony from the mother, both girls, and defendant himself, the jury found defendant guilty of all charges. On appeal, defendant’s judgment was affirmed by the Appellate Division (129 AD3d 1619 [4th Dept 2015]). A Judge of this Court granted defendant leave to appeal (26 NY3d 965 [2015]), and we now affirm.

hH h—I

The Disputed Evidence

The Appellate Division correctly concluded that evidence of defendant’s drug use was an uncharged crime or prior bad act, and that it could be properly admitted as Molineux evidence (see People v Molineux, 168 NY 264 [1901]) because it was not proffered to show defendant’s propensity toward crime, but to corroborate details of the victims’ testimony (129 AD3d at 1620). We agree that evidence of defendant’s use of crack cocaine while engaging in sexual acts was not overly prejudicial in the context of this trial. Further, the trial court prohibited the People from introducing evidence of the crack cocaine recovered from defendant during the execution of the search warrant, thereby exercising its discretion in permitting evidence of drug use only as it pertained to the sex acts described by the victims.

We further agree with the Appellate Division’s conclusion that evidence of defendant’s prior sexual encounters with the girls’ mother and another consenting adult woman was not Molineux evidence, “because it was neither a crime nor a prior bad act for him to receive consensual oral sex from an adult in a closet with his T-shirt pulled over his head” (129 AD3d at 1620). Molineux analysis is limited to the introduction of a prior uncharged crime or a prior bad act. It should not be used to evaluate a prior consensual sexual act between adults.

In the context of this case, we also note that evidence of defendant’s prior sexual acts with adult women is not “propensity” evidence in its traditional sense. When we limit Molineux or other propensity evidence, we do so for policy reasons, due to fear of the jury’s “human tendency” to more readily “believe in the guilt of an accused person when it is known or suspected that he has previously committed a similar crime” (People v Ventimiglia, 52 NY2d 350, 359 [1981], citing Molineux, 168 NY at 313). But here, that defendant had engaged in oral sex with consenting adult women, while in a closet smoking crack with his shirt pulled over his head, showed no propensity to commit the crimes for which he was on trial. That this evidence corroborated the girls’ accounts does not render it propensity evidence, because corroboration and propensity are distinct concepts. Because “there [was] a proper nonpropensity purpose, the decision whether to admit evidence of defendant’s prior . . . acts rests upon the trial court’s discretionary balancing of probative value and unfair prejudice” (People v Frankline, 27 NY3d 1113, 1115 [2016], quoting People v Dorm, 12 NY3d 16, 19 [2009]).

The trial court here properly considered and admitted the evidence using the appropriate factors: its relevance, probative value to the People’s case, and potential prejudice to defendant (see generally People v Harris, 26 NY3d 1, 5 [2015]). Here, there is no real dispute that the evidence was relevant and probative, as it tended to support the girls’ account of their abuse by corroborating the peculiar manner in which defendant engaged in oral sex. Notably, as the Appellate Division pointed out, the People established that the girls had never witnessed defendant’s sexual encounters with their mother or other women, and as the prosecutor argued in her summation, the girls were describing their own experiences.

Finally, the trial court did not abuse its discretion in concluding that the probative value of the evidence was not outweighed by potential prejudice. Plainly, almost all relevant, probative evidence the People seek to admit in a trial against a defendant will be, in a sense, prejudicial. The People generally wish to admit evidence supporting the theory that a defendant is guilty of the crime for which he is charged. Evidence which helps establish a defendant’s guilt always can be considered evidence that “prejudices” him or her. But the probative value of a piece of evidence is not automatically outweighed by prejudice merely because the evidence is compelling. Here, “[t]he point is that the damage resulted from something other than its tendency to prove propensity. That suggests that the evidence must have been relevant to something else, as indeed it was. ... If this evidence was damaging, it was because it had the intended effect—it undermined the defendant’s theory” (People v Hudy, 73 NY2d 40, 72 [1988, Wachtler, Ch. J., dissenting], abrogated on other grounds by Carmell v Texas, 529 US 513 [2000]; see also People v Walker, 83 NY2d 455, 463 [1994] [the People’s use of alias evidence while cross-examining defendant was within the sound discretion of the trial court, and “there is no undue prejudice; there is only the expected— and, indeed, intended—negative impact that naturally flows from evidence admitted for the purpose of impeachment”]).

Here, the evidence of defendant’s prior sexual encounters with adult women while using drugs was prejudicial to him, as it strengthened the People’s case by making the victims’ accounts ring true. However, on this record, taking into account the full extent of the evidence the People sought to introduce, and the trial court’s limitation and, in some instances, outright preclusion thereof, we cannot say that the court abused its discretion in admitting this particular evidence. A trial court enjoys broad discretion in deciding whether to admit evidence, and this Court will disturb the decision “only where the trial court has either abused its discretion or exercised none at all” (Walker, 83 NY2d at 459 [internal quotation marks and brackets omitted], citing People v Williams, 56 NY2d 236, 238 [1982]). Neither concern is implicated here.

III.

Prompt Outcry and Excited Utterance

Finally, defendant argues that the trial court erred in allowing the mother to testify about MD disclosing the abuse to her. Generally, the “prompt outcry exception” to the hearsay rule is limited to testimony that a timely complaint was made, and “does not allow the further testimony concerning details of the incident” (People v Rice, 75 NY2d 929, 932 [1990]). But the People argued that the disclosure was also an excited utterance because it came immediately on the heels of an abusive encounter, while MD was crying and sad, “made while the victim was under the continuing influence of the stress and excitement generated by the initial event” (People v Medina, 53 AD3d 1046, 1047 [4th Dept 2008], lv denied 11 NY3d 856 [2008] [internal quotation marks omitted]). The court allowed the testimony as both a prompt outcry and excited utterance. Here, this brief account of what MD told her mother can be viewed as both a prompt outcry and an excited utterance, and thus the admission was proper.

Accordingly, the Appellate Division order should be affirmed.

Chief Judge DiFiore and Judges Pigott, Rivera, Stein, Fahey and Garcia concur.

Order affirmed.

      . That the People classified it as Molineux evidence, and the trial court considered it on that basis, does not prevent us from concluding it was not. Whether it was given that particular title, the arguments on both sides would remain the same. And though we hold that this was not properly classified as Molineux evidence, we note that the trial court did not abuse its discretion admitting it for the stated non-propensity purposes provided by the People. Nor do we intend by this decision to discourage the People from bringing a challenging or problematic evidentiary issue to the attention of the court and defendant before trial.

      . The trial court indicated it would allow the testimony as a prompt outcry and a “spontaneous utterance.” Given the arguments made by the People and the comments of the court, it is clear that the court used the term “spontaneous utterance” interchangeably with “excited utterance.”