source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    [824 NE2d 488, 791 NYS2d 57]
    In the Matter of Rosemarie Panio, as Chairperson of the Westchester County Republican Committee, Respondent-Appellant, v Carolee Sunderland et al., Constituting the Board of Elections of the County of Westchester, et al., Respondents, Nicholas Spano, Respondent-Appellant, and Andrea Stewart-Cousins, Appellant-Respondent. (And Another Proceeding.)
    Argued January 31, 2005;
    decided February 2, 2005

      POINTS OF COUNSEL

      Henry T. Berger, New York City, Thomas J. Garry, Jeffrey H. Pearlman and Deborah A. Porder for appellant-respondent.
    I. Affidavit ballots cast in the wrong election district, whether in the right polling place or the wrong polling place or as a result of “map error,” should be cast and canvassed. (Matter of Wicksel v Cohen, 262 NY 446; People ex rel. Hirsh v Wood, 148 NY 142; Sheils v Flynn, 252 App Div 238, 275 NY 446; Matter of Luck v Fisk, 243 AD2d 812; Matter of Weinberger v Jackson, 28 AD2d 559; Matter of Mullen v Heffernan, 193 Misc 334, 274 App Div 972, 298 NY 785; Ex parte Yarbrough, 110 US 651; United

      States v Mosley, 238 US 383; Reynolds v Sims, 377 US 533; Burdick v Takushi, 504 US 428.) II. Absentee ballots submitted by poll workers who actually worked on Election Day in response to an absentee ballot application provided to them by the board of elections and setting forth that the applicant was a poll worker should be cast and canvassed. (Matter of Gross v Albany County Bd. of Elections, 10 AD3d 476, 3 NY3d 251; Griffin v Burns, 570 F2d 1065.) III. Affidavit ballots which did not have identifying election district information on the face of the ballot envelopes, but whose source was identified at the time they arrived at the board of elections, should be cast and canvassed. IV Affidavit ballots cast by voters because someone else had signed the poll book in their place prior to the voters arriving at the polls should be cast and canvassed. (Matter of Mondello v Nassau County Bd. of Elections, 6 AD3d 18.)

      John Ciampoli, Albany, and David L. Lewis, New York City, for respondents-appellants.
    I. The exclusion of ballots improperly voted, false on their face in their affidavits, and lacking proof of ministerial error by any board of elections employee should be affirmed. (Gross v Albany County Bd. of Elections, 10 AD3d 476, 3 NY3d 251.) II. Determinations to exclude the remaining classes of ballots were based on findings of fact upon the record below. III. No constitutional claim was raised below. It should not be added to respondent’s claims for the first time. (Di Bella v Di Bella, 47 NY2d 828; National Org. for Women v State Div. of Human Rights, 32 NY2d 940; Cibro Petroleum Prods, v Chu, 67 NY2d 806; Matter of Barbara C., 64 NY2d 866.)
   OPINION OF THE COURT

Per Curiam.

These appeals arise from the November 2, 2004 general election for the 35th State Senatorial District between Republican candidate Nicholas Spano and Democratic candidate Andrea Stewart-Cousins. After a close race, the Chairperson of the Westchester County Republican Committee and the Democratic candidate commenced separate proceedings to determine, among other things, the validity of certain absentee and affidavit ballots. Five categories of challenged ballots, not yet counted, are before us. All are from duly registered voters. We now modify the order of the Appellate Division.

Under Election Law § 8-302 (3) (e),

“[wjhenever a voter presents himself and offers to cast a ballot, and the address at which he claims to live is in the election district in which he seeks to vote but no registration poll record can be found for him in the poll ledger or his name does not appear on the computer generated registration list or his signature does not appear next to his name on such computer generated registration list,” the voter may vote only by court order (see Election Law § 8-302 [3] [e] [i]) or by sworn
“affidavit stating that he has duly registered to vote, the address in such election district from which he registered, that he remains a duly qualified voter in such election district, that his registration poll record appears to be lost or misplaced or that his name and/or his signature was omitted from the computer generated registration list or that he has moved within the county or city since he last registered, [and] the address from which he was previously registered and the address at which he currently resides. . . . The inspectors of election shall offer such an affidavit to each such voter whose residence address is in such election district” (Election Law § 8-302 [3] [e] [ii]).

Upon subscribing such a sworn affidavit, the voter must be permitted to vote by emergency ballot. A number of voters here cast affidavit ballots in the correct polling site but the wrong election district. We hold that the 160 (now 163) affidavit ballots cast by these voters should be counted.*

When a ballot is contested in a judicial proceeding, the court must, after determining that the person who cast the ballot was entitled to vote, order the ballot to be counted “if the court finds that ministerial error by the board of elections or any of its employees caused such ballot envelope not to be valid on its face” (Election Law § 16-106 [1]; see also Election Law § 9-209 [2] [a] [2]).

Because the risk of fraud inherent in absentee balloting is less in affidavit voting, where the voter presents himself or herself in person before board personnel on Election Day, imposing such a minimal requirement of directing a voter to the correct election district within the same polling site will not invite impermissible deviation from statutory requirements devised to ensure fair elections (compare Matter of Gross v Albany County Bd. of Elections, 3 NY3d 251, 260 [2004]). We can reasonably infer that casting an affidavit ballot at the correct polling site but at the wrong election district is the result of ministerial error on the part of a poll worker in failing to direct the voter to the correct table, and instead providing the voter with an affidavit without first properly verifying such voter’s right to vote in the election district (Election Law § 8-302 [1]).

We agree, however, with the courts below that the 450 (now 457) affidavit ballots cast by voters who had gone to the wrong polling place and therefore voted in the wrong election district should not be counted. Here, the voters at issue were offered such affidavits even though their residence addresses were not in the election districts in which they were permitted to vote. Neither had these voters appeared at their correct polling site.

As the courts below recognized, Election Law § 4-100 (1) provides that the state “shall be divided into election districts which shall be the basic political subdivision for purposes of registration and voting.” It would be unreasonable to require poll workers to ensure that voters are in their proper polling site. Therefore, on this record, the voters’ error of going to the wrong polling place cannot be attributed to the ministerial error of election workers.

We agree with the Appellate Division that the 45 absentee ballots cast by poll workers should be counted. Election Law § 11-302 allows poll workers to vote by “special ballot” if they provide a “written statement” indicating that they “will be unable to appear at the polling place for such election district on the day of an election” because of their duties as election workers. Election Law § 11-302, however, does not prescribe the form of such written statements. Since it was ministerial error for the Board of Elections to direct that poll workers apply for special ballots using absentee ballot applications, and since the poll workers’ applications contained the substance of the required statement—that they were working the polls on Election Day—their votes must be counted.

Next, we conclude that the 20 affidavit ballots enclosed in envelopes that did not identify the election district in which they were tendered should be counted. There is no claim that these ballots were not properly cast in the first instance, nor that they were unidentifiable upon reaching the Board of Elections. When workers removed the ballots from their respective election district bags, they discovered that the election district had not been indicated on the individual ballot envelopes. Some Board employees then affixed to the envelopes yellow “Post-it Notes” containing the missing information, which subsequently became dislodged. Such mishandling also plainly reflects ministerial error on the part of Board employees.

Finally, we hold that the courts below properly excluded the three affidavit ballots cast by voters who were denied the opportunity to vote by machine because other voters had allegedly signed the poll ledgers in their place. Inasmuch as votes had already been cast in the names of these voters, the possibility of fraud is manifest. In this circumstance, the exclusive remedy available to the voters was to seek a court order allowing the voter to vote (see Election Law § 16-108 [3]).

In conclusion, the ballots that will be counted were in dispute only due to the Board’s ministerial errors. In upholding the Election Law we refrain from an interpretation that will disenfranchise 228 voters because of such ministerial errors. We direct that those ballots be cast and canvassed—opened and counted as per Election Law § 9-209 (2) (a) (2) and § 16-106 (1).

Accordingly, the order of the Appellate Division should be modified, without costs, in accordance with this opinion and, as so modified, affirmed. The certified question should not be answered upon the ground that the Appellate Division order is final and thus the certified question is unnecessary.

Read, J. (dissenting in part). The key issue dividing me from the majority is whether to count 160 affidavit ballots cast by voters who appeared in the wrong election district at the correct polling site. As is often the case with the Election Law appeal of a hotly contested, very close race, this issue presents us with a choice between hewing to strict compliance with the law or blinking what some may view as legal technicalities so that a ballot cast by a registered voter may be counted. Because our case law and, in my view, sound jurisprudential practice strongly favor the former approach, I joined the majority in our recent decision in Matter of Gross v Albany County Bd. of Elections (3 NY3d 251 [2004]) and respectfully dissent here.

In New York, the election district is the “basic political subdivision” for voting (see Election Law § 4-100 [1]). Election Law § 9-209 (2) (d) expressly authorizes objection to the casting and canvassing of any affidavit ballot “on the grounds that the voter is not a properly qualified voter of the election district” designated on the affidavit. Thus, an affidavit ballot tendered by a voter in the wrong election district implicates the voter’s qualifications (see Election Law § 8-302 [1], [2], [3] [e] [ii]; § 9-209 [2] [d]; see also Matter of Carola v Saratoga County Bd. of Elections, 180 AD2d 962, 963-964 [3d Dept 1992]; Matter of Marraccini v Balancia, 182 AD2d 628, 630 [2d Dept 1992]).

Section 9-209 of the Election Law provides generally for the casting and canvassing of envelopes and affidavit ballots contained therein; subdivision (2) (a) (2) of this provision states that “[i]f the board of inspectors determines that a person was entitled to vote at such election it shall cast and canvass such [affidavit] ballot if such board finds that ministerial error by the board of elections or any of its employees caused such ballot envelope not to be valid on its face.” Similarly, in a court proceeding contesting the casting or canvassing or the refusal to cast challenged affidavit ballots, “[i]f the court determines that the person who cast such ballot was entitled to vote at such election, it shall order such ballot to be cast and canvassed if the court finds that ministerial error by the board of elections or any of its employees caused such ballot envelope not to be valid on its face” (Election Law § 16-106 [1]).

We have recently characterized “ministerial error” as merely “suggesting] a clerical or other inconsequential mistake comparable to the situation in Matter of Carney v Niagara County Bd. of Elections (8 AD3d 1085 [4th Dept 2004] [where the Board failed to date/time-stamp a military ballot envelope that was timely filed])” (Gross, 3 NY3d at 259 n 3). Further, although sections 9-209 (2) (a) (2) and 16-106 (1) of the Election Law authorize a board of elections and supreme court respectively to cause an affidavit ballot to be counted when the envelope’s facial invalidity results from the board’s ministerial error, these provisions contemplate that the ballot’s proponent has the burden of going forward and the burden of proving ministerial error. Failure to tender an affidavit ballot in the correct election district is not the type of inconsequential or technical deficiency that we may overlook. Today, however, the majority equates “ministerial error,” which is applicable only to facial defects on ballot envelopes, to errors that result in voters tendering affidavit ballots in the wrong election districts.

The majority has thus expanded the concept of ministerial error to encompass a duty on the part of inspectors to make certain that a voter who appears at the proper polling site tenders his affidavit ballot in the correct election district. Assuming for the sake of argument that the Election Law imposes this duty on inspectors and that its breach is a ministerial error, there is, as the Appellate Division observed, “after carefully reviewing the 2,333-page trial transcript, . . . insufficient evidence to support a finding that these particular 160 voters tendered affidavit ballots in the wrong election districts because of ministerial errors on the part of the poll workers” (14 AD3d 627, 631 [2d Dept 2005]). Not one of these 160 voters testified at all, much less testified that a poll worker misdirected, misinformed or somehow failed to assist in finding the correct election district. Nor is there proof of systemic failure of the board to notify voters of the correct election district or otherwise to perform its duties properly. In fact, more than 118,000 votes were cast in this election without incident.

The majority overcomes this seemingly insurmountable evidentiary deficiency by creating and applying a presumption that it is, in effect, always the fault of the board or its employees when a voter tenders an affidavit ballot in the wrong election district within the correct polling site. Nothing in the Election Law’s language or legislative history supports such a presumption. In fact, this spanking new presumption—which relieves the improperly tendered affidavit ballot’s proponent from the burden of going forward to prove ministerial error and instead places on the ballot’s opponent the burden of rebuttal—stands the Election Law on its head.

There is no suggestion of voter fraud here; however, requiring a voter to tender his affidavit ballot in the correct election district safeguards the integrity of the electoral process. Currently, the board checks the poll ledger in the election district in which the voter has affirmed he is registered, and thus ensures that he has not voted multiple times—by one or more affidavit ballots or by machine. If the presumption now is that an affidavit ballot tendered at the right polling site but the wrong election district is valid, the potential for fraud will be enhanced as the board’s cross-checking and verifying to prevent multiple voting will only be relevant when an affidavit ballot is contested.

This was one of those elections where, after the canvassing of the machine vote, the winning candidate’s margin of victory was so slim as to flirt with the margin of error inherent in any electoral contest. The candidates have, in effect, tied, and the “true” winner is essentially unknowable. Although the rival candidates and their respective champions would hardly agree, when this situation arises it is arguably less important which candidate is declared the winner than it is to declare one of them a winner expeditiously. Here, the election took place on November 2, 2004, the Legislature convened its 2005 session on January 5, 2005 and, nearly a month later, the 35th Senatorial District remains unrepresented in the New York State Senate. One of the salutary consequences strict adherence to the provisions of the Election Law promotes—in addition to those that we outlined in Gross (3 NY3d at 258)—is predictability, which serves to hasten resolution of close elections. By deviating from the exact requirements of the Election Law here, the majority exhibits a willingness to interpret the statute with a creativity bound to sow uncertainty and thus prolong litigation in future close elections to the disadvantage of the electorate as a whole.

Accordingly, I would affirm the order of the Appellate Division.

Chief Judge Kaye and Judges G.B. Smith, Ciparick, Rosenblatt and R.S. Smith concur in per curiam opinion; Judge Read dissents in part and votes to affirm in a separate opinion in which Judge Graffeo concurs.

Order modified, etc.

      . While a sixth, separate category of “map error” accounting for 10 votes was before the courts below, we have regrouped those 10 votes into their larger categories: seven ballots cast by voters at wrong polling sites and consequently wrong election districts, and three ballots cast by voters at correct polling sites but wrong election districts.

      . This would be consistent with the Westchester Board’s policy to count ballots cast in the right polling site, but wrong election district. The Westchester County Board of Elections provided instructions to its employees that when a “voter cast[s] ballot at incorrect polling site” it was “not to be opened” but when a “voter cast[s] ballot at correct polling site[,] wrong ED,” after checking lists the ballot is “to be opened.”

      . The dissent is concerned with safeguarding the integrity of the electoral process (see dissenting op at 131). The rule we adopt today reasonably strikes a balance between the duty imposed by statute on boards of elections and their workers and the rights of a voter to cast a vote free from undue restriction as guaranteed by article II of the New York State Constitution, which states that “[e]very citizen shall be entitled to vote at every election . . (NY Const, art II, § 1).


author: Chief Judge Kaye.

text:
    [824 NE2d 494, 791 NYS2d 63]
    In the Matter of Francis G. D’Ambrosio, Appellant, v Department of Health of the State of New York et al., Respondents.
    Argued January 4, 2005;
    decided February 10, 2005

      POINTS OF COUNSEL

      Phillips Nizer LLP, New York City (Michael J. Silverberg and Candice Frost of counsel), for appellant.
    I. Appellant’s conviction of professional misconduct without evidence, without notice of the charges and without fair opportunity to defend violated established precedent and his constitutional due process rights. (Matter of McBarnette v Sobol, 83 NY2d 333.) II. The Appellate Division’s construction of the relevant statutes directly conflicts with this Court’s decision in Matter of Halyalkar v Board of Regents of State of NY. (72 NY2d 261 [1988]) and established principles of due process of law. (Matter of Becker v DeBuono, 239 AD2d 664; Matter of Ikramuddin v DeBuono, 256 AD2d 1039; Matter of Herberman v Novello, 280 AD2d 814.) III. Petitioner’s conviction without notice of charges or a fair opportunity to defend violated his constitutional due process rights. (Matter of Hecht v Monaghan, 307 NY 461; College Sav. Bank v Florida Prepaid Postsecondary Educ. Expense Bd., 527 US 666; Johnson v Zerbst, 304 US 458; Jells v Ohio, 498 US 1111; Matter of Murray v Murphy, 24 NY2d 150; Matter of Ruffalo, 390 US 544; Matter of Shapiro v Board of Regents of Univ. of State of N.Y., 16 NY2d 783; Goldberg v Kelly, 397 US 254; Matter of Fitzgerald v Libous, 44 NY2d 660; Boddie v Connecticut, 401 US 371.)

      Eliot Spitzer, Attorney General, New York City (Jean Lin, Michelle Aronowitz and Mike S. Belohlavek of counsel), for respondents.
    I. Education Law § 6530 (9) (d) does not require a finding of guilt of the foreign misconduct charges before a physician may be disciplined in New York. (Matter of Halyalkar v Board of Regents of State of N.Y., 72 NY2d 261; Matter of Sternberg v Administrative Review Bd. for Professional Med. Conduct, 235 AD2d 945; Matter of Hatfield v Department of Health, 245 AD2d 703; Matter of Herberman v Novello, 280 AD2d 814; Matter ofl kramuddin v DeBuono, 256 AD2d 1039; Matter of Khan v New York State Dept, of Health, 274 AD2d 784; Matter of Becker v DeBuono, 239 AD2d 664; Matter of Storar v Dillon, 52 NY2d 363.) II. The application of Education Law § 6530 (9) (d) to Francis D’Ambrosio’s case comports with due process requirements. (Matter of Block v Ambach, 73 NY2d 323; Matter of Amarnick v Sobol, 173 AD2d 914; Matter of Steckmeyer v State Bd. for Professional Med. Conduct, 295 AD2d 815; Matter of Taylor v Board of Regents of Univ. of State of N.Y., 208 AD2d 1056; Matter of Shapiro v Board of Regents of Univ. of State of N.Y., 16 NY2d 783; Matter of Murray v Murphy, 24 NY2d 150; Matter of Brigham v DeBuono, 228 AD2d 870; Matter of Dhabuwala v State Bd. for Professional Med. Conduct, 225 AD2d 209; Matter of Schoenbach v DeBuono, 262 AD2d 820; Matter of Sasson v Commissioner of Educ., 127 AD2d 875.)
   OPINION OF THE COURT

Chief Judge Kaye.

Appellant doctor challenges the discipline imposed on him by the Board for Professional Medical Conduct, based on his voluntary surrender of his license in Nevada, after malpractice charges there. We conclude that the Appellate Division correctly upheld the administrative determination.

Facts

In 1987, appellant obtained his medical license in New York. He has not been registered as a physician in this state since December 1992, and has never practiced here. From 1993 until 2000, he was an orthopedic surgeon in Las Vegas, Nevada. In 2000, he relocated his practice to California and allowed his Nevada license to lapse. Appellant alleges that at the time he relocated to California, he had no intention of returning to Nevada.

On March 22, 2002, the Nevada Investigative Committee of the Board of Medical Examiners issued a 10-count complaint alleging professional malpractice in appellant’s treatment of seven patients between 1995 and 2000. Appellant was charged both with “[c]ontinual failure to exercise the skill or diligence or use the methods ordinarily exercised under the same circumstances by physicians in good standing practicing in the same specialty or field” (Nev Rev Stat 630.306 [7]) and with malpractice as “evidenced by claims settled against a practitioner” (Nev Rev Stat 630.301 [4]). Nevada law required that a complaint contain a “short and plain statement of the matters asserted”; if requested, “a more definite and detailed statement must be furnished” (Nev Rev Stat 233B.121 [2] [d]).

The complaint identified appellant’s seven former patients as “A” through “G.” The complaint alleged that following surgery, patient A suffered complications including cauda equina syndrome; that following surgery, patient B suffered extensive edema with ischemia resulting in postoperative quadriparesis and bone graft impingement; and that following surgery and placement of an interior plate in patient E, appellant recommended further surgery for postoperative complications and patient E was later diagnosed as an asymmetrical quadriplegic. For these patients, the complaint set forth the date of surgery, that each patient had filed a medical malpractice action with the Nevada Medical Dental Legal Screening Panel and the case number of each action, that each of these actions had been settled and the settlement amount (patient A: $675,000; patient B: $1,927,000; patient E: $3,500,000).

For patients C, D and G, the complaint identified the dates of surgery and preoperative diagnosis. For patient F, the complaint identified the date of surgery, preoperative diagnosis, type of surgery performed and resulting complications.

In addition to the opportunity to request a more definite and detailed statement, Nevada law provided that the “[opportunity must be afforded all parties to respond and present evidence and argument on all issues involved” (Nev Rev Stat 233B.121 [4]). Appellant made no request for more details and no response to the allegations of the complaint. Instead, on April 17, 2002—under oath in his attorney’s office in California—appellant signed a Voluntary Surrender Of License To Practice Medicine In The State Of Nevada While Under Investigation (see Nev Admin Code, ch 630, § 240). In the document, he acknowledged that he was aware that he was under investigation for violations of the Medical Practice Act, that he “voluntarily, absolutely, and irrevocably surrender[ed] his license to practice medicine in the state of Nevada,” and that his surrender was subject to chapter 630, § 240 of the Nevada Administrative Code. Chapter 630, § 240 (1) states that “[i]f the Board accepts the surrender of the license, the surrender is absolute and irrevocable and the Board will notify any agency or person of the surrender and the conditions under which the surrender occurred, as the Board considers advisable.”

On June 1, 2002, the Nevada State Board of Medical Examiners “having considered the matter . . . and good cause appearing,” issued an order stating “[t]hat the irrevocable surrender of the license to practice medicine in the state of Nevada, while under investigation ... is accepted.” The Board proceeded no further with its disciplinary action.

Shortly thereafter, on September 27, 2002, the New York State Board for Professional Medical Conduct commenced a “referral proceeding” against appellant, alleging that he “violated New York Education Law § 6530 (9) (d) by having surrendered his license . . . after a disciplinary action was instituted by a duly authorized professional disciplinary agency of another state, where the conduct resulting in the surrender . . . would if committed in New York state, constitute professional misconduct under the laws of New York state.” The Board further claimed that appellant’s conduct resulting in the surrender of his license would constitute misconduct under the laws of New York pursuant to Education Law § 6530 (3) (negligence on more than one occasion); § 6530 (4) (gross negligence); § 6530 (5) (incompetence on more than one occasion); and/or § 6530 (6) (gross incompetence). Public Health Law § 230 (10) (p) required appellant to file a written answer to the charges, and provided that “any charge or allegation not so answered shall be deemed admitted.” No written answer is contained in the record.

On December 19, 2002, the Board withdrew the charges of gross negligence and gross incompetence, and a three-member Hearing Committee proceeded with a conference and expedited hearing (see Public Health Law § 230 [10] [p]; see also Matter of Wolkoff v Chassin, 89 NY2d 250, 252 n [1996]). At the conference, the Administrative Law Judge informed appellant that he was “free to introduce evidence explaining what the reason was for signing the surrender document, and he [was] free to submit evidence about what he did or did not do with these patients.” Appellant moved for dismissal on the ground that the proceeding violated due process and fundamental fairness, which the Administrative Law Judge denied.

At the hearing that followed immediately, the Board submitted the notice of referral proceeding, statement of charges, the Nevada complaint, appellant’s voluntary surrender and the Nevada order accepting the surrender. Testifying in his own defense, appellant—in one-word denials—denied knowledge of the substance of the claims made against him, denied that he committed malpractice or did anything negligent in the treatment of the patients listed in the complaint, denied that he could explain how the charges against him were incorrect, denied that the Nevada committee presented facts about his alleged wrongdoing, and denied that anyone explained the charges to him. Asked why he chose to surrender his Nevada license, he explained that, after speaking to his attorney, “rather [than] go to the expense of having to fight and stand before counsels and try to get my point of view across, that the option they gave me was to surrender my license to make everything go away. I wanted to leave Nevada. I never planned on going back. I just wanted it all to end.” Appellant stated he “didn’t do anything below the standard of care,” and that his lawyer had advised him that there would be no collateral consequences resulting from the surrender of his Nevada license.

The Hearing Committee dismissed the professional misconduct charges on the ground that the evidence was insufficient for a finding that, had the alleged conduct occurred in New York, it would constitute any type of professional misconduct here. The five-member Administrative Review Board overturned the Hearing Committee, concluding that appellant surrendered his license to avoid litigation of the charges, that the surrender raised the inference that the charges were meritorious, and that the conduct for which appellant was disciplined would have amounted to professional negligence and incompetence in New York. For a penalty, the Board determined that, should appellant return to New York to practice, “five years on probation, with a monitor and pre-operative review, will allow the State to oversee [appellant’s] practice to assure that [he] has corrected the deficiencies in his practice that resulted in his license surrender in Nevada.” On CPLR article 78 review, the Appellate Division confirmed the administrative determination. We now affirm.

Discussion

Appellant contends that the finding of professional misconduct based on his voluntary surrender in Nevada violated the New York statute as well as due process of law. We begin with the statute.

In 1980, the Legislature enacted Education Law § 6509 (5) (b) to define professional misconduct as “[h]aving been found guilty . . . by a duly authorized professional disciplinary agency of another state” of conduct that, if undertaken in New York, would amount to professional misconduct under New York law (L 1980, ch 866, § 4). Physicians who resolved disciplinary charges in other states without actual findings of guilt—whether by surrendering their licenses there, or by consent to sanctions—were thus able to avoid discipline in New York, unless New York could overcome the obvious difficulty of securing records and witnesses and prosecute charges based on out-of-state events.

In 1985, the Legislature added Education Law § 6509 (5) (d) to close that gap by permitting New York’s licensing authorities to discipline a professional if, “after a disciplinary action was instituted by a duly authorized professional disciplinary agency of another state” the professional surrendered his or her license or otherwise consented to discipline before any finding of guilt (L 1985, ch 294, § 11). The statute imposed two requirements before a finding of professional misconduct in New York: the voluntary surrender of a license after disciplinary action was instituted by a duly authorized professional disciplinary agency of another state, and the conduct resulting in the surrender that would, if committed in New York, constitute professional malpractice in this state. In 1991, the Legislature consolidated the various existing statutory and regulatory definitions of professional misconduct applicable to physicians in a new article 131-A of the Education Law and imported the language of section 6509 (5) (d) into section 6530 (9) (d) (see Assembly Mem in Support, L 1991, ch 606, Bill Jacket, at 21 [“amends Public Health Law section 230, subdivision 1, to refer to definitions of professional misconduct in 6530 and 6531 in the Education Law in lieu of existing definitions in 6509 of the Education Law”]; see also Matter of Wolkoff v Chassin, 89 NY2d 250, 252-253 [1996]).

We reject appellant’s interpretation of Education Law § 6530 (9) (d) as requiring proof of guilt of the out-of-state misconduct charges. Plainly, the Legislature enacted Education Law § 6509 (5) (d), from which Education Law § 6530 (9) (d) is derived, in order to close a loophole—in other words, to address precisely the situation before us by subjecting a physician to disciplinary review if (as found by the Administrative Review Board in the case before us) “the physician ‘voluntarily’ surrendered his or her license in another state to avoid a finding of medical misconduct” (Mem of State Exec Dept, 1985 McKinney’s Session Laws of NY, at 3027). Indeed, if appellant were correct—if proof of guilt still were required—the statutory provisions regarding voluntary surrender would add nothing to the disciplinary scheme and would be rendered meaningless.

Appellant misconstrues Matter of Halyalkar v Board of Regents (72 NY2d 261 [1988]) when he argues that New York cannot give preclusive effect to an out-of-state disciplinary order accepting a voluntary surrender of license that has not been actually litigated. The issue presented in Halyalkar was whether the New York Board of Regents properly invoked the doctrine of collateral estoppel, using settlement of misconduct charges in New Jersey offensively to prove the merits of those charges in a later New York proceeding. We concluded that there was no identity of issue essential to collateral estoppel because misconduct had not been litigated in New Jersey—petitioner had entered a plea. Notably, however, Halyalkar was decided on collateral estoppel grounds, did not involve a referral proceeding pursuant to Education Law § 6530 (9) (d), and predated the statutory amendments eliminating a requirement that guilt be proved.

We further reject appellant’s contention that his due process rights were violated by the failure of the Nevada complaint to put him on notice of what he had done wrong, and by the failure to provide a full and fair opportunity to defend against those charges in Nevada and New York.

Appellant had both notice and an opportunity to be heard in Nevada. As we observed in Matter of Block v Ambach, “in the administrative forum, the charges need only be reasonably specific, in light of all the relevant circumstances, to apprise the party whose rights are being determined of the charges against him and to allow for the preparation of an adequate defense” (73 NY2d 323, 333 [1989] [internal citations omitted]). While a complaint totally devoid of detail would not suffice, the Nevada complaint, though minimal, sufficiently advised appellant of the charges against him, particularly when coupled with the malpractice action screening and settlement procedures and the statute requiring that a more definite and detailed statement be furnished upon request. Appellant deliberately chose not to avail himself of the opportunity to obtain greater specificity of the charges had he wanted it. Additionally, under Nevada law appellant was afforded the right to a hearing, with full procedural safeguards—all of which he relinquished by his conscious choice to surrender his license, with notice that that act alone might have consequences elsewhere (see Nev Admin Code, ch 630, § 240).

Nor was appellant denied due process in New York. The New York statute put appellant on notice that he would be subject to discipline here if he voluntarily surrendered an out-of-state medical license after charges against him for conduct that, if committed here, would constitute professional misconduct under New York law. Due process does not require that appellant additionally be afforded the opportunity to litigate the merits of the Nevada charges here. In a referral proceeding, moreover, the law requires only that a complaint “state the substance of the alleged professional misconduct” and “the material facts but not the evidence by which the charges are to be proved” (Public Health Law § 230 [10] [b]). Here, the Department of Health relied on the Nevada complaint, which alleged that appellant “failed ... to use reasonable care, skill, or knowledge ordinarily used under similar circumstances, which resulted in . . . malpractice in his treatment of” the identified patients. Under New York law, practicing medicine “with negligence on more than one occasion” and practicing medicine “with incompetence on more than one occasion” constitute professional misconduct (Education Law § 6530 [3], [5]). No reasonable distinction can be made between a failure to use reasonable care resulting in malpractice as alleged in the Nevada complaint and the terms “negligence” and “incompetence” used in the New York statute.

Apart from having received sufficient notice of the charges, appellant had an opportunity at the hearing to offer evidence and explain the nature of his alleged conduct. As in Nevada, appellant chose not to avail himself of the opportunity New York law offered.

Accordingly, the judgment of the Appellate Division should be affirmed, with costs.

Judges G.B. Smith, Ciparick, Rosenblatt, Graffeo, Read and R.S. Smith concur.

Judgment affirmed, with costs.

       Nevada law at the time required that such actions be filed with a screening panel before proceeding to court and that the claimant provide a “clear and concise statement of the facts of the case, showing the persons involved and the dates and circumstances, so far as they are known, of the alleged medical . . . malpractice” (Nev Rev Stat 41A.039 [2], repealed by L 2002 [18th Sp Sess], ch 3, § 69, eff Oct. 1, 2002). The Panel was required to consider all documentary evidence, including the complaint, answer and response, health care records, dental records and records of a hospital or office and the testimony of any expert witnesses and determine from that evidence whether there was a reasonable probability of medical malpractice (id., 41A.049 [2]). If a reasonable probability existed, the patient, doctor and the doctor’s insurer had to attend a mandatory settlement conference before a judge to determine the “reasonable value of the claim for purposes of settlement” (id., 41A.059 [1], [5]).


author: Graffeo, J.

text:
    [824 NE2d 499, 791 NYS2d 68]
    The People of the State of New York, Respondent, v Victor T. Thomas, Appellant.
    Argued January 13, 2005;
    decided February 15, 2005

      POINTS OF COUNSEL

      Legal Aid Society, Hempstead (Christopher M. Cevasco, Kent V. Moston and Jeremy L. Goldberg of counsel), for appellant.
    The Appellate Term erred in reinstating the superseding information that had been dismissed by trial court, as these instruments were jurisdictionally defective both facially and given the procedures employed in their filing. (People v Casey, 95 NY2d 354; People v English, 189 Misc 2d 230; People v Rosa, 169 Misc 2d 350; People v Pratt, 164 Misc 2d 498; People v Cunningham, 74 Misc 2d 631; People v Harris, 169 Misc 2d 51; People v Morel, 157 Misc 2d 94; People v Barhan, 147 Misc 2d 253; People v Twine, 121 Misc 2d 762; People v Cibro Oceana Term. Corp., 148 Misc 2d 149.)

      Denis Dillon, District Attorney, Mineola (Lawrence J. Schwarz and Peter A. Weinstein of counsel), for respondent.
    The intermediate appellate court acted correctly in reinstating the criminal charges against defendant; the prosecution is permitted to file successive informations. (People v Douglass, 60 NY2d 194; People v Nuccio, 78 NY2d 102; People v Rodriguez, 11 NY2d 279; People v Leyra, 1 NY2d 199; People v Rosenthal, 197 NY 394; People v Lyons, 178 AD2d 552; People v Franco, 86 NY2d 493; People v Cade, 74 NY2d 410; People v Silverman, 253 App Div 683, 278 NY 670; People v Bowman, 84 NY2d 923.)
   OPINION OF THE COURT

Graffeo, J.

In this case we are asked to decide whether the People may file a new information that alleges additional facts or charges offenses that were not included in a previously filed information but stem from the same criminal transaction. We hold that the Criminal Procedure Law authorizes the filing of such an accusatory instmment.

In April 2002, police officers responded to a report of domestic violence at a residence in Nassau County. According to the People, the female victim informed the officers that defendant had assaulted her and she requested their assistance in removing him from the home. Defendant, however, refused to leave the premises. After purportedly threatening and hitting one of the officers in the leg with a bag, defendant was told that he was under arrest. Defendant allegedly responded by clenching his fists and moving toward the officer in a menacing fashion. The officer claimed that even after defendant was wrestled to the ground, he continued to resist being handcuffed.

As a result of this incident, defendant was charged in separate accusatory instruments (denominated as informations by the parties) with one count of third-degree assault, based on his attack of the complainant, and one count of resisting arrest. The victim, however, declined to pursue the assault charge. Faced with this lack of cooperation, two new informations were filed. The first—a superseding information—restated the charge of resisting arrest and elaborated on the facts by describing the threatening utterances made by defendant when he refused to leave the apartment, adding that defendant struck one of the officers in the leg with a “bag of property.” The second—a successive information—charged a new crime, harassment in the second degree, based on defendant’s conduct toward the police officer. This accusatory instrument also set forth defendant’s verbal threat and actions, together with an allegation that defendant moved toward the officer in a “threatening manner” after being told that he was under arrest. District Court dismissed the original resisting arrest information as superseded and the assault information at the People’s request.

Defendant then moved to dismiss the second set of informations, arguing that CPL 100.50 prohibited the People from charging harassment in the second degree since that crime was not charged in the original informations. Defendant also claimed that the harassment and resisting arrest charges were defective because both accusatory instruments relied on new facts not set forth in the original informations, and the charges were not supported by nonhearsay factual allegations as required by CPL 100.40 (1) (c). District Court granted defendant’s motion, dismissing the informations as defective under CPL 100.50. The court adhered to its determination on reargument.

The Appellate Term modified and reinstated the informations. The court concluded that the People were not prohibited from charging the new crime of harassment because the Criminal Procedure Law did not limit a prosecutor’s ability to file more than one accusatory instrument in a criminal action, and the resisting arrest charge should not have been dismissed because the offense was based on conduct that was described in the original information. A Judge of this Court granted leave to appeal and we now affirm.

Defendant’s challenge to the informations is premised primarily on CPL 100.50, the statute governing the use of two categories of accusatory instruments—superseding informations and superseding prosecutor’s informations. In contrast to a misdemeanor complaint, which may contain hearsay allegations, an information or a prosecutor’s information must be supported by nonhearsay allegations that establish every element of the offense charged (see People v Casey, 95 NY2d 354, 360 [2000]). The two types of informations are definitionally distinct: an information must set forth the required nonhearsay evidentiary allegations within “the four corners of the instrument itself’ or in annexed supporting depositions, whereas a prosecutor’s information must rely on some other source (e.g., a previously filed accusatory instrument) to establish every element of the charged offense (Preiser, Practice Commentaries, McKinney’s Cons Laws of NY, Book 11A, CPL 100.10, at 330; compare CPL 100.40 [1], with CPL 100.40 [3]).

According to defendant, CPL 100.50 requires the People to use only a prosecutor’s information—not an information—to charge crimes that were not included in a previous information and, as such, additional factual allegations may not be included in a subsequent accusatory instrument. The plain language of the statute refutes defendant’s assertion:

“1. If at any time before entry of a plea of guilty to or commencement of a trial of an information or a prosecutor’s information, another information or, as the case may be, another prosecutor’s information is filed with the same local criminal court charging the defendant with an offense charged in the first instrument, the first such instrument is, with respect to such offense, superseded by the second and, upon the defendant’s arraignment upon the latter, the count of the first instrument charging such offense must be dismissed by the court. The first instrument is not, however, superseded with respect to any count contained therein which charges an offense not charged in the second instrument.
“2. At any time before entry of a plea of guilty to or commencement of a trial of an information, the district attorney may file with the local criminal court a prosecutor’s information charging any offenses supported, pursuant to the standards prescribed in subdivision one of section 100.40, by the allegations of the factual part of the original information and/or any supporting depositions which may accompany it. In such case, the original information is superseded by the prosecutor’s information and, upon the defendant’s arraignment upon the latter, is deemed dismissed” (CPL 100.50).

Subdivision (1) of CPL 100.50 authorizes the People to file “another information” prior to the “entry of a plea of guilty to or commencement of a trial of an information” (CPL 100.50 [1]; see also CPL 100.05). Significantly, the statute imposes no restrictions on the type of crimes that may be included in a new information. Since a new crime may be charged, the statute necessarily implies that new facts may be alleged in support of any additional offenses (see CPL 100.40 [1] [c]). Notably, nothing in subdivision (2) of CPL 100.50 restricts the People’s ability to provide additional factual detail in a new information.

The Legislature’s purpose in enacting CPL 100.50 (1) buttresses our conclusion that it is permissible to file a new information charging new offenses and alleging additional facts. Subdivision (1) was added “to establish authority for superseding informations and prosecutor’s informations,” a subject not addressed in the earlier Code of Criminal Procedure (Preiser, Practice Commentaries, McKinney’s Cons Laws of NY, Book 11 A, CPL 100.50, at 461). The drafters of the Criminal Procedure Law imported the rules regarding superseding indictments into CPL 100.50 (1) by the use of virtually identical statutory language (compare CPL 100.50 [1], with CPL 200.80). The Criminal Procedure Law, like its predecessor, recognizes that “a prosecutor has absolute freedom to obtain a new grand jury indictment for replacement of one that is pending, or any count within it” (Preiser, Practice Commentaries, McKinney’s Cons Laws of NY, Book 11 A, CPL 200.80, at 532), “which would presumably—and logically—contain charges not considered or voted upon by the first Grand Jury” based on “additional proof’ of criminal activity (People v Franco, 86 NY2d 493, 500 [1995]). It therefore follows that the Legislature intended that prosecutors should also be able to issue an information that charges new, joinable crimes premised on factual allegations that were not included in the original information. Indeed, article 170 of the Criminal Procedure Law does not specify that a subsequent information is defective if it charges new crimes or alleges new facts (see CPL 170.30, 170.35).

Defendant’s remaining contention—that the superseding information charging resisting arrest was defective because it relied on hearsay statements attributed to the victim—also lacks merit. The information was not used to prove that the victim’s assertion was true but to demonstrate that there was reasonable cause to arrest defendant (see generally People v Huertas, 75 NY2d 487, 492 [1990]; People v Felder, 37 NY2d 779, 780-781 [1975]).

Accordingly, the order of the Appellate Term should be affirmed.

Chief Judge Kaye and Judges G.B. Smith, Ciparick, Rosenblatt, Read and R.S. Smith concur.

Order affirmed.


author: Rosenblatt, J.

text:
    [824 NE2d 929, 791 NYS2d 489]
    Credit Suisse First Boston Corporation, Appellant, v William Pitofsky et al., Respondents.
    Argued January 4, 2005;
    decided February 10, 2005

      POINTS OF COUNSEL

      Quinn Emanuel Urquhart Oliver & Hedges, LLP, New York City (Michael B. Carlinsky, Kevin S. Reed and Partha P. Chattoraj of counsel), Pierre M. Gentin, George C. Whipple III, and Gideon A. Schor for appellant.
    I. The Federal Arbitration Act and controlling decisions by this Court and numerous federal courts establish that parties may supersede the Form U-4 and self-regulatory organizations’ arbitration rules with privately negotiated agreements. (Doctor’s Assoc., Inc. v Casarotto, 517 US 681; Matter of Salvano v Merrill Lynch, Pierce, Fenner & Smith, 85 NY2d 173; Flanagan v Prudential-Bache Sec., 67 NY2d 500; Fletcher v Kidder, Peabody & Co., 81 NY2d 623; Gerling Global Reins. Corp. v Home Ins. Co., 302 AD2d 118; Southland Corp. v Keating, 465 US 1; Matter of Smith Barney, Harris Upham & Co. v Luckie, 85 NY2d 193; Volt Info. Sciences, Inc. v Board of Trustees of Leland Stanford Jr. Univ., 489 US 468; Mastrobuono v Shearson Lehman Hutton, Inc., 514 US 52; Matter of Advest, Inc. v Wachtel, 253 AD2d 659.) II. The Employment Dispute Resolution Program’s “carve-out” provision is inapplicable because neither the Form U-4 nor the New York Stock Exchange (NYSE) Rules legally require registered representatives to arbitrate exclusively before the NYSE. (Roney & Co. v Goren, 875 F2d 1218; Creative Sec. Corp. v Bears Stearns & Co., 671 F Supp 961.)

      Wechsler & Cohen, LLP, New York City (David B. Wechsler and Marc O. Sheridan of counsel), for respondents.
    I. Credit Suisse First Boston Corporation’s Federal Arbitration Act argu-

      merit is belated and barred. (Matter of Eagle v Paterson, 57 NY2d 831; Melahn v Hearn, 60 NY2d 944; Harrison v Salomon Bros., 156 Misc 2d 341; Simpson v Loehmann, 21 NY2d 990.) II. The First Department correctly held that New York state law, not the Federal Arbitration Act, controls, and that accordingly the arbitration provision in the Form U-4 may not be superceded by a subsequent employment agreement. (Hamilton v Cantor Fitzgerald Sec., 265 AD2d 526; O’Donnell v First Invs. Corp., 872 F Supp 1274; Harrison v Salomon Bros., 156 Misc 2d 341; Gilmer v Interstate/Johnson Lane Corp., 500 US 20; Volt Info. Sciences, Inc. v Board of Trustees of Leland Stanford Jr. Univ., 489 US 468; F.N. Wolf & Co. v Bowles, 160 Misv 2d 752; Thomas James Assoc., Inc. v Jameson, 102 F3d 60; Merrill Lynch, Pierce, Fenner & Smith, Inc. v Georgiadis, Inc., 903 F2d 109; Luckie v Smith Barney, Harris Upham & Co., 999 F2d 509; Matter of Cowen & Co. v Anderson, 76 NY2d 318.) III. Even if the Federal Arbitration Act applies, the First Department correctly held that respondents fit squarely under the Employment Dispute Resolution Program carve-out directing arbitration at the New York Stock Exchange. (Bushley v Credit Suisse First Boston, 360 F3d 1149; Surgidev Corp. v Eye Tech., Inc., 648 F Supp 661, 828 F2d 452.) IV The First Department correctly ruled that the obligation here to arbitrate in the New York Stock Exchange forum is imposed on Credit Suisse First Boston Corporation and respondents due to their affiliation with and assent to the Rules of the New York Stock Exchange. (Matter of Harrigan, 126 Misc 2d 298; CBS Broadcasting v Primetime 24 Joint Venture, 48 F Supp 2d 1342; Credit Suisse First Boston, LLC v Padilla, 326 F Supp 2d 508; Smith/Enron Cogeneration Ltd. Partnership, Inc. v Smith Cogeneration Intl., Inc., 198 F3d 88.) V. Credit Suisse First Boston Corporation has not met its burden of establishing that respondents knowingly, voluntarily and intentionally waived their right to arbitrate before a self-regulatory organization. (Johnson v Zerbst, 304 US 458; Merrill Lynch, Pierce, Fenner & Smith v Georgiadis, Inc., 903 F2d 109; Ray v Credit Suisse First Boston Corp., 200 F Supp 2d 532.) VI. Credit Suisse First Boston Corporation’s contention that the decision and order has far-reaching adverse consequences for the entire securities industry is without evidentiary support or merit.
   OPINION OF THE COURT

Rosenblatt, J.

This appeal calls upon us to address two questions. First, can an arbitration clause of a privately negotiated employment agreement between a broker-dealer and its registered representative employees supersede the arbitration provisions of an earlier agreement between the employees and the New York Stock Exchange? Second, under the employment agreement at issue, did the parties supersede the preexisting agreement as it applies to this dispute? We answer the first question yes and the second no.

L

Credit Suisse First Boston (CSFB), a member of the New York Stock Exchange (NYSE) and other exchanges, hired William Pitofsky in 1985 and Edward Santoro in 1997. During 2000 and 2001, CSFB employed them as real estate salespersons to help liquidate multi-billion dollar real estate portfolios. When they started work, both Pitofsky and Santoro executed Uniform Application for Securities Industry Registration or Transfer forms U-4 (Form U-4) transferring their securities industry registrations to CSFB. They filed these forms with several self-regulatory organizations (SROs), including the NYSE and the National Association of Securities Dealers. A Form U-4 contains a standard arbitration clause requiring registered representatives “to arbitrate any dispute, claim or controversy that may arise between [them] and [their] firm . . . that is required to be arbitrated under the rules, constitutions, or by-laws of the [relevant SRO].”

In January 1998, CSFB adopted an Employment Dispute Resolution Program (EDRP) and announced it in the employee handbook. Pitofsky’s and Santoro’s 20Ó0 and 2001 employment agreements with CSFB incorporated the EDRP’s provisions by specific reference.

By its terms, the EDRP applies to employment-related claims that employees might have against CSFB and provides that it is the only means by which employees may seek to resolve such claims. The EDRP sets forth a three-stage grievance process. The first stage involves an internal grievance procedure, which is initiated when employees alert their immediate supervisors of a dispute. The second entails external mediation by a single mediator supplied by JAMS/Endispute, a provider of dispute resolution services. If CSFB and the employee fail to resolve their dispute in the first two stages, the EDRP’s third stage calls for binding arbitration before JAMS/Endispute, the American Arbitration Association or the Center for Public Resources Institute for Dispute Resolution. Under the EDRP, the first party to seek arbitration may determine which of the three to employ.

Although the EDRP generally applies to all employment-related disputes, it features a carve-out provision, stating that

“[i]f a registered representative is subject to a legal requirement that he or she arbitrate Employment-Related Claims pursuant to particular rules or in a particular forum (for example, at or pursuant to the rules of a stock exchange), to the exclusion of other forums and rules, that requirement will prevail over the arbitration procedures described herein” (emphasis added).

The provision also explains that registered representatives subject to the carve-out must satisfy the EDRP’s internal grievance and mediation requirements before proceeding to arbitration under the auspices of a non-EDRP forum.

CSFB terminated Pitofsky’s and Santoro’s employment in March 2002. Following their dismissals, both Pitofsky and Santoro claimed that CSFB owed them additional monies under their employment contracts, and proceeded under the first and second steps of the EDRP When resort to CSFB’s grievance and mediation process failed, the pair sought arbitration before the NYSE, pursuant to their Forms U-4, instead of one of three organizations specified by the EDRP

Claiming that, first, the EDRP superseded the Form U-4 and, second, that the EDRP carve-out was inapplicable, CSFB insisted on arbitration before JAMS, one of the three groups identified by the EDRP Pursuant to CPLR 7503 (b), CSFB also sought a permanent stay of the NYSE arbitration. Pitofsky and Santoro cross-moved to compel CSFB to arbitrate before the NYSE and to dismiss CSFB’s petition for a permanent stay of arbitration. The two argued that an agreement between a broker-dealer and its registered representative employees cannot supplant the registered representatives’ separate, preceding Form U-4 agreements to arbitrate their disputes before the NYSE. In the alternative, they maintained that, even if their agreement with CSFB could supersede their Form U-4 arbitration agreement, the EDRP’s carve-out exception applied and their dispute was therefore arbitrable only before the NYSE.

Reasoning that the EDRP arbitration procedures supplanted the relevant Form U-4 provision, Supreme Court granted CS-FB’s application to stay the NYSE arbitration, directed the parties to proceed to arbitration before JAMS, and denied Pitofsky’s and Santoro’s cross motion to compel arbitration before the NYSE. The court also rejected their claim that the EDRP carve-out removed them from the EDRP’s arbitration regime. The court determined that the EDRP carve-out applied only when the registered representative was “legally required” to arbitrate before a particular SRO, and that neither the NYSE Constitution or Rules nor the Form U-4 established such a requirement.

The Appellate Division reversed, denied CSFB’s petition to stay arbitration and directed the parties to arbitrate before the NYSE (2 AD3d 6 [1st Dept 2003]). Characterizing CSFB’s position as “erroneous,” the Court held that the carve-out provision clearly applied to Pitofsky and Santoro (id. at 9). It further determined that, as a matter of state law, “employment agreements cannot supersede the previously executed Form U-4 agreements between” registered representatives and an' SRO (id.). We granted CSFB leave to appeal from the Appellate Division order, which we now affirm on different grounds.

IL

Whether an arbitration agreement between a broker-dealer and a registered representative may supersede a prior arbitration agreement between the registered representative and an SRO presents a general issue of contract interpretation governed by New York law. Contrary to the Appellate Division’s determination, we hold that the arbitration provisions of an employment agreement between a broker-dealer and a registered representative may supersede an earlier arbitration agreement between the registered representative and a stock exchange.

In reaching this conclusion, we need only look to established principles of contract law. Essentially, the present appeal involves a valid, enforceable modification of an earlier agreement by a later one. By implication, the EDRP modifies the arbitration requirements set forth by the Form U-4. Moreover, in addition to manifesting their assent to be bound by the EDRR Pitofsky and Santoro received valuable consideration (continued, lucrative employment by CSFB) for their acceptance of the new arbitration provisions.

Regardless of whether CSFB was technically a direct party to the Forms U-4 executed between its employees and the NYSE, as a practical matter such obligations as Pitofsky and Santoro may have had under the Form U-4 arbitration provision flowed directly and exclusively to CSFB, not the NYSE. Put differently, the arbitration provisions in the Form U-4 effectively constituted an agreement between CSFB and its registered representatives to arbitrate grievances before a NYSE forum.

Given this arrangement, CSFB and its registered representatives were free to negotiate the terms by which they would arbitrate employment-related disputes, just as any two parties to a bilateral contract could agree to modify it. In this context, arbitration is a creature of contract, and it has long been the policy of this State to “interfere as little as possible with the freedom of consenting parties” in structuring their arbitration relationship (see Matter of Siegel [Lewis], 40 NY2d 687, 689 [1976]). Accordingly, the parties were free to supplant or modify the Form U-4 arbitration agreement with the protocols articulated in the EDRP

m.

The EDRP exempts registered representatives from its arbitral forum selection provision if they are “subject to a legal requirement” to “arbitrate Employment-Related Claims pursuant to particular rules or in a particular forum . . . , to the exclusion of other forums and rules” (emphasis added). Although an arbitration agreement between a broker-dealer and registered representative may modify a Form U-4 agreement, the terms of the EDRP require us to look to the Form U-4 to see whether the carve-out applies. As relevant here, the Form U-4 merely requires registered representatives to arbitrate “any dispute, claim or controversy that may arise between me and my firm . . . that is required to be arbitrated under the rules, constitutions, or by-laws” of the SROs with which they registered.

In turn, the Form U-4 directs us to look to the particular rules of the NYSE to determine whether Pitofsky and Santoro face a “legal requirement” to arbitrate their claims before that organization. Critical to our analysis, NYSE Rules, rule 347 (a) provides that

“any controversy between a registered representative and any member or member organization arising out of the employment or termination of employment of such registered representative by and with such member or member organization shall be settled by arbitration, at the instance of any such party, in accordance with the arbitration procedure prescribed elsewhere in these rules” (emphasis added).

Pitofsky and Santoro argue that this rule establishes a legal requirement for them to arbitrate before the NYSE. We agree.

CSFB maintains that, on its face, the phrase “at the instance of any such party” suggests that there is no binding obligation for either CSFB, or Pitofsky or Santoro, to arbitrate before the NYSE. The parties, CSFB claims, would face a legal requirement to arbitrate before the NYSE only if one of them affirmatively elected it as a forum. This does not amount to a legal requirement, CSFB argues. In support of this position, CSFB cites two recent Federal District Court cases (see Credit Suisse First Boston, LLC v Padilla, 326 F Supp 2d 508 [SD NY 2004]; Credit Suisse First Boston, LLC v Groves, 333 F Supp 2d 229 [SD NY 2004]).

Respectfully, we disagree with these decisions and believe that NYSE rule 347 does create a legal requirement. The sole significance of the phrase “at the instance of any such party” is that it gives both the employer and the registered representative a right to initiate arbitration before the NYSE. As it pertains to this case, however, there is no meaningful distinction between a rule 347 with the words “at the instance of any such party” and a rule 347 without such language. If a hypothetical rule 347 were simply to read “the parties shall arbitrate,” it would operate in the same manner as the present rule if neither party wanted to arbitrate before the NYSE. Under the hypothetical rule 347, the parties would be under no greater compulsion to arbitrate before the NYSE than they would under the present rule. In both cases, the parties could agree to modify the NYSE arbitration requirement or waive it altogether.

That the parties could, in theory, agree to modify their obligation to arbitrate before the NYSE pursuant to rule 347 does not make the rule any less of a “legal requirement.” Because arbitration agreements are inherently contractual, the parties may agree to modify them. The ability to alter prior agreements by mutual assent is, after all, essential to contract. A contract does not lose its legally binding character merely because it may be waived or modified. We therefore hold that the arbitral obligation created by the interplay of the Form U-4 and rule 347 constitutes a “legal requirement” under the EDRP carve-out.

Although it is not central to our analysis, we note, additionally, that CSFB itself announced that the carve-out applied to claims brought by registered representatives. In January 1999, CSFB circulated a notice to all of its registered representative employees, informing them that the EDRP’s third stage

“provides for arbitrations thereunder to take place through one of three designated service providers, none of which is affiliated with the securities industry. When the Program was instituted, an exception was made to these and other provisions of the Program relating to arbitration for claims of employees registered with the NASD or a stock exchange (£RRs’) that were of a type that the RRs were required, under their U-4s, to arbitrate before the NASD or a stock exchange, pursuant to its rules. The Program provided that, as to these claims, the NASD and stock exchange rules regarding arbitration took precedence over the arbitration rules in the Program.”

The memorandum further stated that the EDRP’s primary focus was statutory discrimination claims. The stock exchanges, the notice explained, had begun eliminating the requirement that such claims be arbitrated before them. In short, CSFB’s contention that Pitofsky and Santoro fail to satisfy the “legal requirement” provision of the EDRP carve-out does not square with its own reading of the employment agreement.

Accordingly, the order of the Appellate Division should be affirmed, with costs.

Chief Judge Kaye and Judges G.B. Smith, Ciparick, Graefeo, Read and R.S. Smith concur.

Order affirmed, with costs.

      . In pertinent part, CPLR 7503 (b) provides “a party who has not participated in the arbitration and who has not made or been served with an application to compel arbitration, may apply to stay arbitration on the ground that a valid agreement was not made or has not been complied with . . . .”

        . CSFB argues that the Federal Arbitration Act (FAA [9 USC § 1 et seq.]), not state law, governs this dispute. We disagree. Notwithstanding the generally preemptive sweep of the FAA, the federal statute contemplates that state contract law principles resolve the questions presented on this appeal (see generally Perry v Thomas, 482 US 483, 492 n 9 [1987]; Doctor’s Assoc., Inc. v Casarotto, 517 US 681, 687 [1996]).

      . See generally In re Prudential Ins. Co. of Am. Sales Practice Litig. All Agent Actions, 133 F3d 225 (3d Cir 1998) (holding that an employer had standing to compel arbitration under a Form U-4, even if it is not a signatory to the agreement).