author: Read, J. Smith, J. (dissenting).

text:
    [964 NE2d 1010, 941 NYS2d 543]
    In the Matter of Stephen Rosenblum, Respondent, v New York City Conflicts of Interest Board et al., Appellants.
    Argued January 11, 2012;
    decided February 9, 2012

      POINTS OF COUNSEL

      Michael A. Cardozo, Corporation Counsel, New York City (Stephen J. McGrath, Andrea J. Berger, Spencer Fisher and Susan B. Eisner of counsel), for appellants.
    The New York City Conflicts of Interest Board is authorized to commence a hearing against petitioner at the Office of Administrative Trials and Hearings for a violation of the Conflicts of Interest Law. (Matter of City of New York v Uniformed Fire Officers Assn., Local 854, IAFF, AFL-CIO, 95 NY2d 273; Matter of New York State Off. of Children & Family Servs. v Lanterman, 14 NY3d 275; Matter of Felix v New York City Dept. of Citywide Admin. Servs., 3 NY3d 498; Matter of Board of Higher Educ. of City of NY. v Allen, 6 NY2d 127; Matter of General Elec. Capital Corp. v New York State Div. of Tax Appeals, Tax Appeals Trib., 2 NY3d 249; People v Judiz, 38 NY2d 529; People v Van Buren, 4 NY3d 640; Holt v Board of Educ. of Webutuck Cent. School Dist, 52 NY2d 625; Belle v Town Bd. of Town of Onondaga, 61 AD2d 352; Matter of Maloff v City Commn. on Human Rights, 38 NY2d 329.)

      Bruce K. Bryant, Brooklyn, David N. Grandwetter and Charity M. Guerra for respondent.
    I. The courts below correctly determined that the New York City Conflicts of Interest Board and the Office of Administrative Trials and Hearings do not have jurisdiction to prosecute and discipline petitioner and their attempt to do so violates Education Law § 3020-a. (Matter of Lynch v Nyquist, 34 NY2d 588; TeBordo v Cold Spring Harbor Cent. School Dist., 126 AD2d 542; Matter of Board of Educ. of City School Dist. of City of N.Y. v Mills, 250 AD2d 122; Matter of Awaraka v Board of Educ. of City of N.Y., 59 AD3d 442; Matter of Watkins v Board of Educ. of Port Jefferson Union Free School Dist., 26 AD3d 336; Matter of Syquia v Board of Educ. of Harpursville Cent. School Dist., 80 NY2d 531; Brotherhood of Locomotive Engrs. Div. 269 v Long Is. R.R. Co., 85 F3d 35; Matter of New York State Off. of Children & Family Servs. v Lanterman, 14 NY3d 275; Matter of Felix v New York City Dept. of Citywide Admin. Servs., 3 NY3d 498.) II. Even if Education Law § 3020-a does not preclude an independent prosecution by the New York City Conflicts of Interest Board (COIB), City Charter § 2603 (h) (2) requires the COIB to refer alleged violations by tenured employees to the employer for section 3020-a discipline. (Matter of Rankin v Lavine, 41 NY2d 911; Matter of Frick v Bahou, 56 NY2d 777.)

      Richard E. Casagrande, New York City, and Keith J. Gross for New York State United Teachers, amicus curiae.
    I. Education Law § 3020-a is the exclusive avenue to discipline a tenured pedagogue. (Matter of Board of Educ. of City School Dist. of City of NY. v Mills, 250 AD2d 122, 93 NY2d 803.) II. A fine constitutes discipline under both the Education Law and Conflicts of Interest Law.

      Paul Hastings LLP, New York City (Douglas Koff of counsel), and Jeremy Feigelson for Association of the Bar of the City of New York, amicus curiae.
    “Discipline” in Education Law § 3020 does not encompass the New York City Conflicts of Interest Board’s imposition of a fine against a tenured education employee. (Holt v Board of Educ. of Webutuck Cent. School Dist., 52 NY2d 625; People v Santi, 3 NY3d 234; Matter of Sutka v Conners, 73 NY2d 395; Albany Area Bldrs. Assn. v Town of Guilderland, 74 NY2d 372.)

      Proskauer Rose LLP, New York City (Peter J.W. Sherwin, Matthew J. Morris and Justin M. Collins of counsel), for Citizens Union, amicus curiae.
    The Conflicts of Interest Board has a vital mandate that other agencies cannot fulfill, which does not conflict with the Education Law. (Matter of City of New York v

      Uniformed, Fire Officers Assn., Local 854, IAFF, AFL-CIO, 95 NY2d 273; Golden v Clark, 76 NY2d 618; Evans v Carey, 40 NY2d 1008, Matter of Nicholas v Kahn, 47 NY2d 24; Matter of Edge Ho Holding Corp., 256 NY 374; 41 Kew Gardens Rd. Assoc. v Tyburski, 70 NY2d 325; Lane v City of Mount Vernon, 38 NY2d 344; Matter of Levy v City Commn. on Human Rights, 85 NY2d 740; Holt v Board of Educ. of Webutuck Cent. School Dist, 52 NY2d 625; Matter of Bott v Board of Educ., Deposit Cent. School Dist, 41 NY2d 265.)
   OPINION OF THE COURT

Read, J.

We hold that the Conflicts of Interest Board of the City of New York (the Board or COIB) is authorized to enforce the Conflicts of Interest Law (NY City Charter §§ 2600-2607) against a public servant who is subject to discipline under sections 3020 and 3020-a of the Education Law. As a result, the lower courts improperly prohibited respondents COIB and the City’s Office of Administrative Trials and Hearings (OATH) from proceeding with an administrative trial against petitioner Stephen Rosenblum, a tenured assistant principal in the City’s public school system.

I.

In 1964, the Legislature enacted General Municipal Law article 18 to “define areas of conflicts of interest in municipal transactions,” while “leaving to each community the expression of its own code of ethics” (L 1964, ch 946, § 1). New York City’s Conflicts of Interest Law is applicable to all of the City’s current and former employees, and sets out various ethics rules designed “to preserve the trust placed in the public servants of the city, to promote public confidence in government, to protect the integrity of government decision-making and to enhance government efficiency” (NY City Charter § 2600).

Adopting the recommendation of the Charter Revision Commission, City voters in 1988 approved the creation of COIB as an independent body with the power to enforce the Conflicts of Interest Law (id. §§ 2602-2603). Whenever the Board receives a written complaint alleging violations of the law, it must take one of four actions: dismiss the complaint if it determines no further steps are required; send the complaint to the Commissioner of the City’s Department of Investigation for further inquiry; make an initial determination that there is probable cause to believe that a violation of the Conflicts of Interest Law has occurred; or refer the matter to the head of the agency employing the public servant in those cases where the violation is deemed minor, or related disciplinary charges are pending there (id. § 2603 [e] [2]).

Once the Board makes an initial determination, whether based on a complaint, investigation or other information, it must notify the public servant in writing of the alleged violation (id. § 2603 [h] [1]). If, after consideration of the public servant’s response to this notice, the Board determines that there remains probable cause, it

“shall hold or direct a hearing to be held on the record to determine whether such violation has occurred, or shall refer the matter to the appropriate agency if the public servant is subject to the jurisdiction of any state law or collective bargaining agreement which provides for the conduct of disciplinary proceedings, provided that when such a matter is referred to an agency, the agency shall consult with the board before issuing a final decision” (id. § 2603 [h] [2]; see also 53 RCNY 2-02 [a]; 2-03).

The hearing is conducted by the Board or, upon its behalf, by a Board member, or the Chief Administrative Law Judge or an assigned administrative law judge (ALJ) from OATH (see 53 RCNY 2-03), which has jurisdiction to conduct adjudicatory hearings for all City agencies (NY City Charter § 1048).

Following the hearing, the hearing officer reports recommended findings of fact, conclusions of law and a proposed disposition for the Board’s review and final action (see 53 RCNY 2-04 [a]). If the Board determines that a violation of the Conflicts of Interest Law has occurred, it

“shall, after consultation with the head of the agency served or formerly served by the public servant . . . issue an order either imposing such penalties provided for by this [Conflicts of Interest Law] as it deems appropriate, or recommending such penalties to the head of the agency served or formerly served by the public servant,”

with the exception of members of the City Council and staff, where COIB’s authority is limited to recommending penalties to the Council (NY City Charter § 2603 [h] [3]; see also id. § 2606 [b] [Upon determination of a violation, the Board, “after consultation with the head of the agency involved . . . shall have the power to impose fines of up to twenty-five thousand dollars, and to recommend to the appointing authority (i.e., the employing agency), or person or body charged by law with responsibility for imposing such penalties, suspension or removal from office or employment”]).

Finally, section 2603 (h) (6) of the Charter specifies that

“[njothing contained in this section [2603] shall prohibit the appointing officer [i.e., the employing agency] of a public servant from terminating or otherwise disciplining such public servant, where such appointing officer is otherwise authorized to do so; provided, however, that such action by the appointing officer shall not preclude the board from exercising its powers and duties under [the Conflicts of Interest Law] with respect to the actions of any such public servant.”

From its creation in November 1988 through 2009, the Board has imposed fines on 379 public servants.

In 2007, Rosenblum was employed by the New York City Department of Education (DOE) as a probationary principal at Intermediate School (I.S.) 281, a middle school in Community School District 21 in Brooklyn. COIB received a complaint that Rosenblum had approached the principal of I.S. 228, another middle school in the district, on October 24, 2007 to request favorable treatment for his son, a teacher at I.S. 228. Rosenblum’s son, who had been removed from the classroom the previous month because of allegations of misconduct, was at risk of being fired. Rosenblum was alleged to have offered for his son to “leave the school and seek a job elsewhere” if the principal of I.S. 228 accommodated Rosenblum by acting to “save” his son’s employment with DOE.

By notice dated April 28, 2008, the Board advised Rosenblum of its initial determination that there was probable cause to believe that this encounter violated section 2604 (b) (3) of the Conflicts of Interest Law, which prohibits a public servant from “us[ing] or attempt [ing] to use his or her position as a public servant to obtain any . . . private or personal advantage, direct or indirect, for the public servant or any person or firm associated with the public servant.” In an answer dated June 27, 2008, Rosenblum asserted that he had “at no time . . . discussed his son’s employment situation” with the principal of I.S. 228.

On August 15, 2008, the Board referred the matter to DOE, Rosenblum’s employing agency, as required by section 2603 (h) (2) and its rules (see 53 RCNY 2-02 [a]); on October 7, 2008, DOE informed the Board that it was not going to take disciplinary action against Rosenblum. That same day, the Board served Rosenblum with a petition asking OATH to find that he had violated the law and to impose a $10,000 fine (the maximum allowed at the time) and grant such further relief as might be just and proper. Rosenblum answered and moved to dismiss on October 17, 2008, arguing that Education Law §§ 3020, 3020-a and 2590-j (7), as supplemented by the collective bargaining agreement (CBA) between DOE and his union, the Council of Supervisors and Administrators, Local 1, AFSA, AFL-CIO (CSA), was the exclusive method for disciplining a tenured pedagogue.

Section 3020 (1), entitled “Discipline of teachers,” specifies that “[n]o person enjoying the benefits of tenure shall be disciplined or removed during a term of employment except for just cause and in accordance with the procedures specified in section three thousand twenty-a of this article or in accordance with alternate disciplinary procedures contained in a [CBA] covering his or her terms and conditions of employment” (see also Education Law § 3020 [3] [“Notwithstanding any inconsistent provision of law, the procedures set forth in (Education Law § 3020-a) and (Education Law § 2590-j) may be modified or replaced by agreements negotiated between the city school district of the city of New York and any employee organization representing employees or titles that are or were covered by any memorandum of agreement executed by such city school district and (CSA)”]).

Section 3020-a sets out the disciplinary procedures and penalties applicable where charges are brought against “a person enjoying the benefits of tenure as provided in . . . [Education Law § 2590-j].” Where a penalty is imposed, it

“may be a written reprimand, a fine, suspension for a fixed time without pay, or dismissal. In addition to or in lieu of [these] penalties, the hearing officer, where he or she deems appropriate, may impose upon the employee remedial action including but not limited to leaves of absence with or without pay, continuing education and/or study, a requirement that the employee seek counseling or medical treatment or that the employee engage in any other remedial or combination of remedial actions” (Education Law § 3020-a [4] [a]).

Section 2590-j (7) (a) concomitantly specifies that “[n]o member of the teaching or supervisory staff of schools who has served the full and appropriate probationary period prescribed by, or in accordance with law, shall be found guilty of any charges except after a hearing as provided by [Education Law § 3020-a].”

On January 21, 2009, the ALJ denied Rosenblum’s motion, relying on OATH precedent holding that section 2603 (h) (2) of the City Charter did not preclude the Board from bringing an enforcement proceeding in cases where the employing agency elected not to prosecute. The ALJ further opined that section 2603 (h) (6) “also makes plain that the jurisdiction of [COIB] to enforce the Ethics Law is separate and apart from the jurisdiction of an appointing agency to commence a disciplinary proceeding against its employees”; and that the Board’s action was not discipline within the meaning of Education Law §§ 3020 and 3020-a. The ALJ directed that the hearing commence on January 29, 2009.

On January 28, 2009, Rosenblum commenced this CPLR article 78 proceeding, seeking to prohibit the Board and OATH from proceeding with the scheduled administrative trial. Supreme Court granted the petition (2009 NY Slip Op 31073[U] [Sup Ct, NY County 2009]). The judge decided that a fine imposed by the Board would constitute discipline under Education Law § 3020 because section 3020-a’s penalties include a fine; and that section 2603 (h) (6) did not authorize the Board to proceed against Rosenblum once DOE declined to discipline him and, even if it were otherwise, a state statute trumps a local law. The Board and OATH appealed.

The Appellate Division affirmed, concluding that Supreme Court “properly held that the exclusive avenue to discipline a tenured pedagogue is Education Law § 3020-a, and thus it would be violative of the Education Law to allow an OATH hearing which does not require the same procedural protections” (75 AD3d 426, 427 [1st Dept 2010] [citations omitted]). The court observed that “the fine sought to be imposed ... is included in the types of discipline specifically enumerated by [Education Law § 3020-a (4) (a)] as penalties” (id.). We granted the Board and OATH permission to appeal (16 NY3d 706 [2011]), and now reverse.

II.

Rosenblum argues that Education Law § 3020 (1) and § 3020-a establish the exclusive means to discipline him; a fine, because specified as one of the penalties that might be imposed under section 3020-a (4) (a), constitutes discipline; therefore, COIB does not possess jurisdiction to prosecute him for an alleged violation of the Conflicts of Interest Law since an adverse determination might result in a fine. Alternatively, he interprets section 2603 (h) (2) of the City Charter to divest COIB of jurisdiction where a state law or a CBA provides for the employing agency to conduct disciplinary proceedings against a public servant. In essence, Rosenblum contends the employing agency enjoys veto power over Board action in such circumstances. In his case then, Rosenblum reasons, COIB may not take him to a hearing at OATH because DOE declined to pursue the alleged ethics violation under sections 3020 and 3020-a of the Education Law.

First, we see no reason or precedent for defining “discipline” as broadly as Rosenblum urges. There is no dispute that sections 3020 and 3020-a set out the exclusive means for DOE to sanction a tenured pedagogue, including by imposing a fine. It does not follow, however, that COIB may not fine a DOE employee for violating the Conflicts of Interest Law, a separate statutory scheme designed to protect governmental integrity, not to safeguard a tenured pedagogue from arbitrary action by DOE that might adversely affect the terms and conditions of his employment. While COIB may recommend that DOE suspend or remove a tenured pedagogue from employment for an ethics violation (NY City Charter § 2606 [b]), the Board itself may only levy a fíne for the act prompting its recommendation. In our view, then, “discipline” within the meaning of sections 3020 and 3020-a encompasses only job-related penalties that may be imposed upon a tenured pedagogue by his employer—a local school board or, in the case of the City, DOE.

Interestingly, the words “discipline” and “disciplinary” did not even appear in sections 3020 and 3020-a of the Education Law until 1994, several years after the creation of COIB, when the Legislature changed the title of the former from “Dismissal of teachers” to “Discipline of teachers,” and the title of the latter from “Hearing procedures and penalties” to “Disciplinary procedures and penalties” (see L 1994, ch 691, § 2). These and other revisions to sections 3020 and 3020-a codified recommendations of a Moreland Act Commission appointed by Governor Mario Cuomo to study and suggest ways to improve the State’s public school system. The Commission concluded, after extensive public hearings, that the procedures for bringing misconduct charges against tenured teachers “resulted in hearings that were far too expensive and time-consuming . . . estimated to cost in excess of $80,000, and in many instances [to] take over one year to resolve” (Governor’s Approval Mem, Bill Jacket, L 1994, ch 691). Seeking to “balance due process protection for tenured teachers against the need for districts to have an expedient and cost-effective tool for maintaining disciplinary standards,” the Commission recommended several reforms, including replacing the then existing three-member hearing panel in teacher misconduct cases with a single hearing officer empowered “to impose a broad range of penalties, including mandatory remedial action to improve a teacher’s performance” (id.).

Chapter 691, which originated as part of the Governor’s 1994 Legislative Program, thus includes the words “discipline” and “disciplinary” in the titles of sections 3020 and 3020-a respectively to reflect the expanded menu of potential penalties and remedies put in place by the Legislature to carry out the Commission’s recommendations, not to preclude public entities other than a tenured pedagogue’s employer from seeking sanctions for employee misconduct. As the City points out, no one would seriously suggest, for example, that the district attorney could not prosecute a tenured pedagogue for a crime committed on school grounds simply because DOE might (or declined to) pursue a disciplinary action arising out of the same act. Likewise, COIB may impose a fine on a tenured pedagogue for an ethics violation even though DOE is authorized to penalize this employee pursuant to sections 3020 and 3020-a for the same act.

Second, the text and legislative history of the Conflicts of Interest Law belie the notion that the Board may not fine City employees, such as tenured pedagogues, who are also subject to a State law or CBA providing for disciplinary proceedings. Such an interpretation would effectively convert the Board from an independent enforcement agency into an investigative and advisory arm of other City agencies. This is inconsistent with a major reason for the 1988 Charter revision—to create COIB as an entity with the power, which its predecessor the Board of Ethics lacked, to commence administrative actions to enforce the Conflicts of Interest Law.

Section 2603 (h) (2) of the Conflicts of Interest Law requires the Board to refer an alleged ethics violation to the public servant’s employing agency before holding a hearing, and for that agency to consult with the Board before making a final decision. This certainly makes sense as the employing agency may not otherwise be aware of the circumstances underlying the alleged ethics violation and is free to pursue a wider range of penalties for misconduct than the Board. It does not follow, though, that the Board is precluded from proceeding if the agency decides not to pursue disciplinary charges against the public servant for an ethics violation. In many cases, the employing agency may consider it more efficient and cost-effective to defer to the Board, especially where the agency concludes that a fine is the only reasonable potential penalty for the misconduct alleged, even if proven. As noted previously, for example, section 3020-a proceedings last, on average, nearly two years (see n 3, supra). Further, section 2603 (h) (6) of the Conflicts of Interest Law specifically states that the Board is not prevented from acting where the employing agency, in fact, decides to terminate or otherwise discipline a public servant. If the Board may still act when the employing agency has imposed discipline, there is no basis for interpreting the Conflicts of Interest Law as forbidding the Board from acting where the agency has elected not to pursue disciplinary action, especially since such a decision does not connote vindication.

Accordingly, the order of the Appellate Division should be reversed, with costs, and the petition dismissed.

Smith, J. (dissenting).

Education Law § 3020 (1) says: “No person enjoying the benefits of tenure shall be disciplined . . . except ... in accordance with the procedures specified” in Education Law § 3020-a or a collective bargaining agreement. The only question in this case is whether the fine that the New York City Conflicts of Interest Board (COIB) seeks to impose on petitioner is discipline. I see no escape from the conclusion that it is.

In common sense, of course an employee who is fined by his employer for acting unethically is being disciplined. “Discipline” is the word commonly used to refer to a punishment imposed by an employer on an employee for an infraction of the employer’s rules. (By contrast, criminal punishment is not commonly spoken of as “discipline.” Thus, the analogy that the majority draws between a criminal prosecution and a COIB proceeding [majority op at 432] is inapt.) The majority seems to suggest that only the Department of Education (DOE), not the City, is petitioner’s “employer” (majority op at 431), but that cannot be right. If petitioner were not an employee of the City, he would not be a “public servant” as that term is defined in section 2601 (19) of the New York City Charter, and the COIB would have no jurisdiction over him.

It seems self-evident to me that a fine imposed by one’s employer is a form of discipline, but if there were any doubt it would be resolved by Education Law § 3020-a, which is titled “Disciplinary procedures and penalties.” The “penalties” are listed in section 3020-a (4) (a), and “a fine” is among them.

A football player who is fined for breaking curfew has been disciplined. Why is the same not true of an assistant principal fined for the conduct at issue here? Suppose the COIB is successful in this case, and petitioner is required to pay a fine. If he is later asked if he has ever been disciplined, and says no, would anyone say that the answer was truthful?

Thus, the Education Law in plain terms gives petitioner immunity from the kind of proceeding the COIB is bringing in this case. Nothing in the City Charter provisions that empower and regulate the COIB alters that conclusion. Section 2603 (h) (2) of the Charter, which provides for hearings by the COIB, says that the COIB:

“shall refer the matter to the appropriate agency if the public servant is subject to the jurisdiction of any state law or collective bargaining agreement which provides for the conduct of disciplinary proceedings, provided that when such a matter is referred to an agency, the agency shall consult with the [COIB] before issuing a final decision.”

This section, if anything, strengthens petitioner’s argument, for it implies that where a “state law or collective bargaining agreement” is applicable it is “the agency” (here, DOE) that should make the “final decision.”

The City relies, as does the majority, on section 2603 (h) (6) of the Charter, which says:

“Nothing contained in this section shall prohibit the appointing officer of a public servant from terminating or otherwise disciplining such public servant, where such appointing officer is otherwise authorized to do so; provided, however, that such action by the appointing officer shall not preclude the board from exercising its powers and duties under this chapter with respect to the actions of any such public servant.”

The City reads this language—reasonably enough—to say that the decision of the DOE (“the appointing officer”) in this case not to proceed against petitioner does not “preclude” the COIB from doing so. While the provision says only that “action” by the appointing officer in terminating or otherwise disciplining the employee “shall not preclude” a COIB-initiated proceeding, it is fair to infer that a decision not to take such action also will not have preclusive effect. Here, however, no one is saying that the DOE’s choice not to proceed against petitioner is preclusive. What precludes discipline by the COIB is the plain language of Education Law § 3020. The Charter provision does not say, and cannot plausibly be read to imply, that the Education Law provision is inapplicable to discipline imposed by the COIB.

As the majority suggests, it may well be more efficient—it may on the whole be highly desirable—for the COIB to be able to proceed against a tenured DOE employee, regardless of whether the DOE thinks discipline is justified. If that is so, then the Legislature made an unwise choice in providing that such employees may be disciplined only as provided in the Education Law or a collective bargaining agreement. But the Legislature did make that choice, and expressed it in plain language, and we should apply the statute as written.

Chief Judge Lippman and Judges Ciparick, Graffeo and Pigott concur with Judge Read; Judge Smith dissents in a separate opinion in which Judge Jones concurs.

Order reversed, etc.

      . This provision states as follows:
      “(a) Determination of Probable Cause. If, after consideration of the public servant’s response, the Board determines that there remains probable cause to believe that a violation of the provisions of [the Conflicts of Interest Law] has occurred, and the public servant has not elected to forego the hearing, the Board shall hold or direct a hearing to be held on the record to determine whether such violation has occurred.
      “If the public servant is subject to the jurisdiction of a state law provision or collective bargaining agreement which provides for the conduct of a disciplinary hearing by another body, the Board shall refer the matter to the appropriate entity. The hearing shall be conducted in accordance with the rules of that entity.
      “The Board may also refer a matter to the public servant’s agency if the Board deems the violation to be minor or if other disciplinary charges are pending there against the public servant” (53 RCNY 2-02 [a]).

      . Because we conclude that the Conflicts of Interest Law is not inconsistent with sections 3020 and 3020-a of the Education Law, we need not address Rosenblum’s argument that in the event of a conflict the latter would necessarily trump the former.

      . Teacher misconduct hearings are apparently even more protracted today: As part of his 2012-2013 executive budget, Governor Andrew Cuomo has proposed legislation to amend sections 3020 and 3020-a yet again so as to reduce backlogs and costs. According to the Governor, “[r]ecent records show that the arbitration process lasts an average of 653 days—far exceeding the statutory timeframe of 155 days” (see Briefing Book, 2012-2013 Executive Budget and Reform Plan, at 27, available at http://publications.budget.ny.gov/ eBudgetl213/fyl2131ittlehook/BriefingBook.pdf [emphasis added]).

      . At the time, an employing board was only authorized to implement a “penalty or punishment, if any, of a reprimand, a fine, suspension for a fixed time without pay or dismissal” (former Education Law § 3020-a [4]).

      . The Board tells us that over 90% of the City’s workforce is entitled to the civil service protections afforded by section 3020-a or similar provisions of State law.


source: Caselaw Access Project

author: Chief Judge Lippman. Pigott, J. (dissenting).

license: Public Domain

text:
    [963 NE2d 1235, 940 NYS2d 534]
    The People of the State of New York, Appellant, v Gilberto Sosa, Respondent.
    Argued January 12, 2012;
    decided February 14, 2012

      POINTS OF COUNSEL

      Cyrus R. Vance, Jr., District Attorney, New York City (David E Stromes and Christopher P. Marinetti of counsel), for appellant.
    I. The 2009 Drug Law Reform Act proscribes resentencing for any offender who has a violent felony conviction within the 10 years preceding the commission of his instant drug felony, excluding time spent incarcerated since the commission of the violent felony offense. (People v Wright, 78 AD3d 474, 16 NY3d 801; People v Cagle, 7 NY3d 647; People v Dozier, 163 AD2d 220, 78 NY2d 242; People v Collado, 73 AD3d 608.) II. Both the Criminal Procedure Law and the Drug Law Reform Act of 2009 clearly authorize the People to appeal from a resentence on the ground that the resentencing was invalid as a matter of law. (People v Then, 47 AD3d 404, 11 NY3d 527; People v Rodriguez, 40 AD3d 512, 9 NY3d 920; People v Smith, 23 AD3d 280, 7 NY3d 398; People v Bautista, 7 NY3d 838; People v Laing, 79 NY2d 166.)

      Center for Appellate Litigation, New York City (Barbara Zolot and Robert S. Dean of counsel), for respondent.
    I. As the Drug Law Reform Act of 2009 does not authorize the People to appeal a grant of resentencing to the Appellate Division, that court’s order must be dismissed, thereby nullifying the basis for the People’s appeal to this Court and requiring its dismissal. (People v Bautista, 7 NY3d 838; People v De Jesus, 54 NY2d 447; People v Reed, 276 NY 5; People v Marra, 13 NY2d 18; Matter of State of New York v King, 36 NY2d 59; People v Laing, 79 NY2d 166; Matter of Santangello v People, 38 NY2d 536.) II. Criminal Procedure Law § 440.46 (5) (a)’s plain language and precisely defined tolling period, ameliorative purpose, concern for public safety, and the overwhelming weight of authority compel affirmance of the Appellate Division’s look-back rule, which measures “the preceding ten years” from the present, not from the commission date of the drug offense. (People v Kisina, 14 NY3d 153; Majewski v Broadalbin-Perth Cent. School Dist., 91 NY2d 577; People v Paulin, 17 NY3d 238; People v Santiago, 17 NY3d 246; People v Lashley, 83 AD3d 868; People v Hill, 82 AD3d 77; Matter of Alonzo M. v New York City Dept. of Probation, 72 NY2d 662; Paramount Communications v Gibraltar Cas. Co., 90 NY2d 507; People v Cagle, 7 NY3d 647; People v Quinones, 12 NY3d 116.)
   OPINION OF THE COURT

Chief Judge Lippman.

Under the Drug Law Reform Act of 2009 (L 2009, ch 56 [codified in relevant part at CPL 440.46] [hereinafter DLRA-3]), certain defendants serving indeterminate sentences imposed pursuant to the now repealed Rockefeller Drug Laws for class B drug felonies may apply for resentencing. The acknowledged purpose of this remedial legislation is to afford relief to low-level, non-violent drug offenders originally sentenced under a scheme that often mandated “ ‘inordinately harsh punishment’ ” (see People v Paulin, 17 NY3d 238, 244 [2011], quoting Assembly Sponsor’s Mem, Bill Jacket, L 2004, ch 738, at 6). The focus of this appeal is upon one threshold condition of eligibility for relief under DLRA-3, namely, that the applicant for resentencing not have committed what is referred to in subdivision (5) of CPL 440.46 as an “exclusion offense.” To the extent here relevant, an “exclusion offense” is defined in that subdivision as

“a crime for which the person was previously convicted within the preceding ten years, excluding any time during which the offender was incarcerated for any reason between the time of commission of the previous felony and the time of commission of
the present felony, which was: (i) a violent felony offense as defined in section 70.02 of the penal law” (CPL 440.46 [5] [a] [emphasis added]).

The specific difference that occasions this litigation is over the meaning to be attached to the above-quoted definitional phrase “within the preceding ten years.” The People have contended that it means within the 10 years preceding the applicant’s commission of the drug offense upon which resentencing is sought, while defendant has successfully maintained that the vantage for the 10-year look-back is instead the necessarily more recent date of the resentence application.

Following a jury verdict convicting him of criminal possession of a controlled substance in the third and fourth degrees, based on acts dating to August 24, 2002, defendant was sentenced on March 26, 2003, as a second felony offender, to concurrent indeterminate prison terms running, in the aggregate, from 10 to 20 years. On October 7, 2009, defendant applied for resentencing pursuant to the then recently enacted DLRA-3. The People opposed the application on the ground that defendant was ineligible for the requested relief by reason of his commission of an “exclusion offense”; defendant had been convicted of a violent felony—third degree criminal possession of a weapon—on November 27, 1995, and it was the People’s understanding that that conviction temporally qualified as an exclusion offense under CPL 440.46 (5) (a) because the underlying crime was committed less than 10 years before the 2002 drug crimes for which defendant sought resentencing. Defendant responded that, under the governing statute, the 10-year look-back period extends from the date of the DLRA-3 resentence application, not the date of the crime or crimes for which resentence is sought.

The resentence court, accepting defendant’s contention as to the point from which the look-back should be measured, found him eligible for resentencing and, in the absence of any objection to the application upon the ground that substantial justice precluded relief (see CPL 440.46 [3] [incorporating by reference L 2004, ch 738, § 23 (DLRA of 2004)]), resentenced defendant, as a second felony offender with a predicate violent felony conviction, to an aggregate prison term of seven years.

The Appellate Division affirmed (81 AD3d 464 [1st Dept 2011]), agreeing with defendant that the critical 10-year retrospect should extend from the date of the resentence application, a conclusion by now reached as well by each of the remaining departments (see People v Lashley, 83 AD3d 868, 868 [2d Dept 2011]; People v Carter, 86 AD3d 653, 654 [3d Dept 2011]; People v Hill, 82 AD3d 77, 79 [4th Dept 2011]). A Judge of this Court granted the People’s application for leave to appeal, and we now affirm.

The result of adopting the People’s reading of CPL 440.46 (5) (a), which functions to exclude from the 10-year look-back calculation any period of incarceration stemming prospectively from the non-violent drug felony conviction as to which sentencing relief is sought, would be to render permanently ineligible for resentencing not only any defendant who had committed a violent felony within 10 years of the crime for which resentencing is sought (which crime to come within the statute’s purview must have been committed before January 13, 2005 [CPL 440.46 (1)], thus extending the reach of the look-back under the People’s theory, at a minimum, to January 13, 1995), but any otherwise eligible defendant whose prison term subsequent to a prior violent felony operated under the statutory toll to bring that prior violent felony within the 10-year look-back. The Legislature could, of course, have excluded any defendant with a prior violent felony from the statute’s remedial ambit, but did not do so. While it did categorically exclude adjudicated violent predicate felons (see CPL 440.46 [5] [b]), it allowed in its definition of “exclusion offense”—one, which contrary to the premise of the dissent does not turn upon the predicate relationship between the prior (violent) and subsequent (drug) felony—that certain incarcerated non-violent drug felony defendants with temporally remote violent felony convictions would be eligible for DLRA-3 resentencing. We would not hesitate to enforce an intention by the Legislature severely to limit that purportedly benefitted class, even to the virtually plenary extent advocated by the People, if that limitation, although arguably at odds with the broad objectives of the remedial enactment of which it was part, were clearly expressed, but it is not.

Indeed, we see no textual ground for the People’s contention that when the statute describes the look-back simply as “the preceding ten years”—a period that would ordinarily be understood to extend backward from the present, or, from the perspective of the motion court, from the time the resentence application is placed before it—what was really meant was the dramatically different formulation of which the Legislature was doubtless capable (see e.g. Penal Law § 70.04 [1] [b] [iv]), namely, 10 years preceding the commission of the drug offense for which the defendant is presently incarcerated. Although an argument is made to the effect that the use of the phrase, “preceding ten years,” begs a question as to what is preceded, which question must be answered by reference to the entirely distinct phrase, “time of commission of the present felony,” found in the statute’s subsequent toll provision, we are not persuaded, either of the need for clarification or of the method. Even if “the preceding ten years” were an ambiguous expression, which it is not, its meaning as to the point of retrospect would not be properly explained by the circumstance that the statute in a different connection—that of defining the toll applicable in calculating the actual extent of the look-back—refers to the “time of commission of the present felony.”

Somewhat more substantial, but only from a policy perspective and not as a matter of statutory interpretation, is the People’s argument that an anomaly results from construing the statute as the Appellate Division has. Relying upon our observation in People v Cagle (7 NY3d 647, 651 [2006]) that time spent serving a sentence of imprisonment does not demonstrate a felon’s ability to live within the norms of civil society, the People contend that no period of incarceration, either before or after the commission of the present (drug) felony, should be included in the measurement of the 10-year look-back. Cagle, however, involved a look-back to determine eligibility for enhanced punishment under a recidivist sentencing statute. There was no issue raised respecting the Legislature’s undoubted prerogative to determine, in the very different context of defining eligibility for resentencing for the purpose of bringing presumptively harsh sentences into line with current norms, that the often lengthy periods spent in prison under sentences precisely of the sort targeted by the remedial legislation should not effectively preclude a defendant from relief. To be clear, the question now presented is not whether this defendant or any other will be punished as a predicate felon; defendant was both originally sentenced and resentenced as such. The only question is whether a defendant’s enhanced recidivist sentence should, because of his or her commission of a violent felony in the objectively distant and ever-receding past, remain irretrievably governed by a generally outmoded sentencing regimen.

The Legislature, we believe, has addressed this question textually, both by flatly providing that the relevant look-back period is “the preceding ten years,” excluding from the calculation thereof only pre-drug felony incarceration time, and by unmistakably manifesting its judgment that the designedly rehabilitative course of a defendant’s incarceration subsequent to conviction for a low-level, non-violent drug felony may improve and be probative of his or her capacity for a responsible life at liberty. CPL 440.46 (3) expressly contemplates the resentencing court’s consideration of the defendant’s “institutional record of confinement” and prison disciplinary history. The Legislature’s requirement of such consideration is not compatible with the view that time spent incarcerated is categorically without bearing upon, and thus logically to be excluded from counting toward, a defendant’s basic eligibility for sentencing relief under DLRA-3.

Even if there were some arguable anomaly in treating the reformatory significance of an incarceratory course stemming from a prior violent felony differently from one stemming from a subsequent non-violent drug felony—and really there is none—it would remain that the law, as it is written, countenances the disparity and is not properly rewritten to accord more perfectly with judicial or prosecutorial notions of consistency. This is particularly so where, as here, the legislation at issue of necessity involves a complex balancing of several sets of compelling and in some respects competing concerns. To be sure, one of those is public safety, but another is that, as the experience with the Rockefeller Drug Laws has demonstrated, there are extraordinary public costs, both human and economic, to the extended incarceration of low-level drug offenders. The Legislature has evidently determined that a prior, temporally distant violent felony should not itself exclude an otherwise eligible defendant from DLRA-3 relief. This is plainly consistent with the legislation’s necessarily broad remedial objectives in addressing the sequelae of the prior sentencing regimen and should not be effectively nullified as a matter of statutory interpretation. To the extent that the Legislature’s definition of the eligible class in the individual case proves over-inclusive, the proper corrective is achieved by means of the statutorily required exercise of judicial discretion to determine whether relief to an eligible applicant is in the end consonant with the dictates of substantial justice (see CPL 440.46 [3] [incorporating by reference L 2004, ch 738, § 23]; and see e.g. People v Brown, 26 Misc 3d 1204[A], 2010 NY Slip Op 50000[U] [2010]).

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

Pigott, J. (dissenting).

On November 27, 1995, defendant was convicted of criminal possession of a weapon in the third degree (Penal Law § 265.02 [4]), a class D violent felony, and was sentenced to an indeterminate term of 2-4 years. Defendant was arrested for drug-related offenses on August 24, 2002. In March 2003, he was convicted of criminal possession of a controlled substance in the third and fourth degrees, sentenced to concurrent indeterminate terms of 10-20 years and 3-6 years, respectively, and adjudicated a predicate felon based upon his weapons possession conviction.

Defendant moved for resentencing under the Drug Law Reform Act of 2009 (2009 DLRA), asserting that he did not have a “predicate felony conviction for an exclusion offense” which, as relevant here, is defined as:

“(a) a crime for which the person was previously convicted within the preceding ten years, excluding any time during which the offender was incarcerated for any reason between the time of the commission of the previous felony and the time of the commission of the present felony, which was: (i) a violent felony offense as defined in section 70.02 of the penal law” (CPL 440.46 [5] [a] [i] [emphasis supplied]).

Because, in my view, the phrase “within the preceding ten years” refers to the 10 years preceding the drug felony for which resentencing is sought, defendant has a predicate felony conviction for an “exclusion offense” and is not entitled to resentencing.

The Penal Law utilizes the term “predicate felony conviction” to define the relationship between a prior conviction and an instant one (see Penal Law § 70.06 [1] [b] [ii]). In that context, the only natural reading of CPL 440.46 (5) (a) is that the 10-year look-back period should be measured from the date of the “present felony” (i.e., the drug offense for which defendant seeks resentencing). Notably, the term “present felony” is similarly used in Penal Law § 70.06 (1) (b) to refer to the instant felony from which the court is expected to measure in determining whether a defendant has a predicate felony conviction.

It is also significant that CPL 440.46 (5) (a)’s tolling provision references a definitive time period—one that runs from the time of the “commission of the previous felony and the time of the commission of the present felony,” excluding periods of incarceration. There is no express tolling provision for the time a defendant spends incarcerated on the drug offense for which he seeks resentencing, which, in my view, evinces the Legislature’s intent that the only relevant time period for tolling purposes was that time between the commission of the violent felony offense and the drug offense. Under this interpretation, a post-incarceration tolling provision would have been unnecessary where the 10-year look-back period runs from the date of the commission of the drug offense for which defendant seeks resentencing.

Defendant interprets the term “predicate felony conviction” as referring to the relationship between the prior conviction and the date of the application for resentencing. There is no support in either the Penal Law or the CPL for that interpretation and, specifically, there is no reference in the statute that the 10-year look-back period should run from the date of the application. Such an interpretation encourages the kind of gamesmanship that occurred here, where defendant, upon initially learning that he fell within the 10-year look-back period because he moved for resentencing too early (thereby rendering him ineligible), asked Supreme Court to deem his application as being submitted at a later date. The court complied with this request, which, in my view underscores the fallacy of defendant’s argument, namely, that as long as a defendant with a violent felony offense spends enough time incarcerated and does not commit a violent felony while incarcerated, he will eventually be able to seek resentencing.

I agree with the majority that the 2009 DLRA is remedial in nature, but only for certain classes of people sentenced under the Rockefeller Drug Laws: those who have never committed a second violent felony offense or a persistent violent felony offense (see CPL 440.46 [5] [b]), and those convicted of a violent felony offense committed more than 10 years prior to the commission of the drug offense upon which they seek resentencing, “excluding any time during which [they were] incarcerated for any reason” (CPL 440.46 [5] [a]). When it enacted the 2009 DLRA, the Legislature’s intent was to make resentencing available to a finite number of individuals who, due to their nonviolent histories or their having committed violent felony offenses sufficiently remote in time, were entitled to partake in these reforms. The underlying intent of the DLRA reforms was not, in my view, to permit drug offenders with violent histories to reap the benefits of these reforms on a “rolling” basis by counting the time they are incarcerated on the drug felony offense as part of the 10-year look-back period.

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

Judges Cipaeick, Graffeo and Jones concur with Chief Judge Lippman; Judge Pigott dissents and votes to reverse in a separate opinion in which Judges Read and Smith concur.

Order affirmed.

      . It was, in this connection, not disputed that, looking back from the date of defendant’s resentence application, ultimately deemed by the court to have been filed on January 7, 2010, defendant’s 1995 violent felony fell outside of the 10-year statutory period, even after excluding time from the period’s calculation, as the statute directs, by reason of defendant’s term of incarceration for his prior felony.

      . The statute is, in this connection, quite clear when it premises ineligibility for DLRA-3 relief not simply upon the commission of a predicate felony but on “a predicate felony conviction for an exclusion offense” (CPL 440.46 [5] [emphasis added]) and then goes on separately to define an “exclusion offense” as, inter alia, one which must have occurred “within the preceding ten years,” not “10 years preceding the [present] drug felony,” as the dissent posits, a time frame nowhere referred to in the statute, even in its tolling provision (see discussion infra at 441).


author: Gbaffeo, J. Smith, J. (concurring).

text:
    [963 NE2d 1250, 940 NYS2d 549]
    In the Matter of Terrace Court, LLC, Appellant, v New York State Division of Housing and Community Renewal, Respondent. Robert Katel et al., Intervenors-Respondents.
    Argued January 3, 2012;
    decided February 14, 2012

      POINTS OF COUNSEL

      Duane Morris LLP, New York City (Thomas R. Newman of counsel), Wenig Saltiel & Johnson LLP, Brooklyn (Meryl L. Wenig and Arthur Birnbaum of counsel), and Jacob Haberman, New York City, for appellant.
    I. It was arbitrary and an abuse of discretion as a matter of law, for the New York State Division of Housing and Community Renewal, contrary to its own precedents, to deny appellant, in perpetuity, the right to the statutorily mandated, building-wide, major capital improvement (MCI) rent increase for five of the rent-stabilized apartments, and not permit appellant to correct the small portion of the work found to be defective and then obtain the granted MCI increase, prospectively only. (Matter of Charles A. Field Delivery Serv. [Roberts], 66 NY2d 516; 300 Gramatan Ave. Assoc. v State Div. of Human Rights, 45 NY2d 176; Matter of Purdy v Kreisberg, 47 NY2d 354; Matter of Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222; Jensen v Union Ry. Co., 260 NY 1; Matter of IG Second Generation Partners L.P. v New York State Div. of Hous. & Community Renewal, Off. of Rent Admin., 10 NY3d 474.) II. The majority in the Appellate Division misconstrued Rent Stabilization Code (9 NYCRR) § 2522.4 (a) (13), on which appellant relies, as not requiring the New York State Division of Housing and Community Renewal to apply the building-wide major capital improvement increase which it had granted to the five exempted apartments, prospectively only, after the problems that led to their exemption are corrected. (Matter of Residential Mgt. v Division of Hous. & Community Renewal, 234 AD2d 154; Matter of Versailles Realty Co. v New York State Div. of Hous. & Community Renewal, 76 NY2d 325; Matter of Ansonia Residents Assn. v New York State Div. of Hous. & Community Renewal, 75 NY2d 206; Matter of Lang-ham Mansions, LLC v New York State Div. of Hous. & Community Renewal, 76 AD3d 855.)

      Gary R. Connor, General Counsel, New York State Division of Housing and Community Renewal, New York City (Christina S. Ossi of counsel), for respondent.
    The New York State Division of Housing and Community Renewal properly exercised its discretion to permanently exempt five apartments from a major capital improvement (MCI) rent increase because the record shows that the defective conditions remained uncorrected more than 1½ years after the MCI application was filed. (Matter of Versailles Realty Co. v New York State Div. of Hous. & Community Renewal, 76 NY2d 325; Matter of Ansonia Residents Assn. v New York State Div. of Hous. & Community Renewal, 75 NY2d 206; Matter of Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222; Matter of Residential Mgt. v Division of Hous. & Community Renewal, 234 AD2d 154; Simkowitz v New York State Div. of Hous. & Community Renewal, 256 AD2d 51; Festa v Leshen, 145 AD2d 49; Matter of Gilman v New York State Div. of Hous. & Community Renewal, 99 NY2d 144; Matter of Dworman v New York State Div. of Hous. & Community Renewal, 94 NY2d 359; Matter of Empress Manor Apts, v New York State Div. of Hous. & Community Renewal, 147 AD2d 642; Matter of Stork Rest, v Boland, 282 NY 256.)

      Collins, Dobkin & Miller, LLP, New York City (Seth A. Miller

    of counsel), for intervenors-respondents.
    New York State Division of Housing and Community Renewal reasonably exercised its discretion in deciding that defects in the pointing work at issue should result in denying any rent increase for the affected tenants. (Matter of Versailles Realty Co. v New York State Div. of Hous. & Community Renewal, 76 NY2d 325; Matter of Riverton Assoc. v New York State Div. of Hous. & Community Renewal, 15 AD3d 225; Matter of West Vil. Assoc. v Division of Hous. & Community Renewal, 277 AD2d 111; Matter of Metropolitan Life Ins. Co. v New York State Div. of Hous. & Community Renewal, 235 AD2d 354; Matter of Cenpark Realty Co. v New York State Div. of Hous. & Community Renewal, 257 AD2d 543; Matter of Ansonia Residents Assn. v New York State Div. of Hous. & Community Renewal, 75 NY2d 206; Matter of Clermont York Assoc. v Lynch, 271 AD2d 262; Matter of Gilman v New York State Div. of Hous. & Community Renewal, 99 NY2d 144; Matter of Von Bulow, 63 NY2d 221; Simkowitz v New York State Div. of Hous. & Community Renewal, 256 AD2d 51.)

      Himmelstein, McConnell, Gribben, Donoghue & Joseph, New York City (David Hershey-Webb of counsel), for New York State Tenants & Neighbors Coalition, Inc. and another, amici curiae.
    The court below correctly held that the New York State Division of Housing and Community Renewal rationally exercised its discretion in permanently exempting five apartments where the major capital improvement pointing and waterproofing work was not completed at the time the application was filed. (Drucker

      v Mauro, 30 AD3d 37; 390 W. End Assoc. v Harel, 298 AD2d 11; Matter of ATM One v Landaverde, 2 NY3d 472; Matter of Gelston v New York State Div. of Hous. & Community Renewal, 177 Misc 2d 431; Manocherian v Lenox Hill Hosp., 84 NY2d 385; Roberts v Tishman Speyer Props., L.P., 62 AD3d 71, 13 NY3d 270; Simkowitz v New York State Div. of Hous. & Community Renewal, 256 AD2d 51; Matter of Whitehouse Estates v New York State Div. of Hous. & Community Renewal, 5 AD3d 190; Matter of Langham Mansions, LLC v New York State Div. of Hous. & Community Renewal, 76 AD3d 855.)

      Borah, Goldstein, Altschuler Nahins & Goidel, P.C., New York City (Paul N. Gruber and David B. Carera of counsel), for Community Housing Improvement Program of New York City and another, amici curiae.
    Permitting an owner to receive a major capital improvement increase but suspending its collection in order to address individual isolated apartment issues is consistent with New York State Division of Housing and Community Renewal policy, furthers the purpose of the rent laws and represents sound policy. (Matter of Langham Mansions, LLC v New York State Div. of Hous. & Community Renewal, 76 AD3d 855; Matter of Weinreb Mgt. v New York State Div. of Hous. & Community Renewal, 305 AD2d 207; Matter of Peckham v Calogero, 12 NY3d 424; Matter of Dworman v New York State Div. of Hous. & Community Renewal, 94 NY2d 359; Matter of Trump-Equitable Fifth Ave. Co. v Gliedman, 57 NY2d 588; Matter of Lantry v State of New York, 6 NY3d 49; Matter of Charles A. Field Delivery Serv. [Roberts], 66 NY2d 516; Matter of Carol Mgt. Corp. v Commissioner of State of N.Y. Div. of Hous. & Community Renewal, 140 Misc 2d 673; Sutherland v WP Owners Corp., 245 AD2d 382.)
   OPINION OF THE COURT

Gbaffeo, J.

In this appeal we consider whether the Division of Housing & Community Renewal (DHCR) is authorized to grant a major capital improvement rent increase while at the same time permanently exempting particular apartments from the obligation to pay additional rent when circumstances warrant. We hold that DHCR has been granted such authority and, on this record, it was not arbitrary or capricious for DHCR to permanently exempt five apartments.

Petitioner Terrace Court, LLC is the owner of a residential apartment building located at 202 Riverside Drive in Manhattan. The building contains 91 apartments, 37 of which are rent regulated. Terrace Court spent approximately $1.2 million to upgrade the building, which project involved pointing work and the replacement of masonry, lintels and parapets.

An owner of rent-regulated apartments may seek to pass along the costs of a “major capital improvement” (MCI) to its tenants by filing an application with DHCR once the work is completed (see Rent Stabilization Law of 1969 [Administrative Code of City of NY] § 26-511 [c] [6] [b]; Rent Stabilization Code [9 NYCRR] § 2522.4 [a] [2] [i]). In May 2004, Terrace Court applied to DHCR to increase the rents of its regulated apartments on the basis that the construction project qualified as an MCI. It sought an additional $42.58 per month for each room in the 37 apartments. Some tenants objected to the proposal because the construction work had resulted in water from the exterior of the building seeping into their apartments and these conditions had not been rectified.

The tenants’ association sent affidavits to DHCR, including a report from an architect who inspected the building and found that the leaks were consistent with water intruding from outside the building. The association also informed DHCR that the Department of Buildings issued a violation to Terrace Court in November 2004 regarding water-damaged apartments and alleged that the owner had not adequately performed the work on the building’s facade. Terrace Court maintained that the project had been properly completed (it submitted reports from its experts to corroborate this claim) and that, in any event, it had addressed the tenants’ complaints. The owner also advised DHCR that the violation from the Department of Buildings had been dismissed because the water in the identified apartments had been caused by a bathroom leak on an upper level of the building.

In September 2005, approximately 16 months after submission of the MCI application, a DHCR inspector and a Terrace Court employee inspected five allegedly damaged apartments. Each of these residences had walls in various states of disrepair and exhibited staining, discoloration, blistering or cracking. Actual moisture was detected in two of the apartments.

The Rent Administrator granted Terrace Court’s MCI application in December 2005 and raised the monthly rents by $40.20 per room. The order, however, permanently exempted the five inspected apartments from the increase based on the tenants’ complaints and the agency’s inspection. Terrace Court filed a petition for administrative review (PAR) challenging the inspector’s findings and claiming that DHCR lacked the authority to permanently exempt the five apartments. It asserted that the increases related to those residences should have been temporarily suspended until the problems were resolved. DHCR denied the PAR and determined that the permanent exemption for the five apartments was appropriate because the water conditions “existed in the apartments when work was completed just prior to the owner’s filing of the application for an MCI rent increase” and the apartments still exhibited water damage at the time of the DHCR inspection.

Terrace Court then commenced this CPLR article 78 proceeding, asserting that it was arbitrary and capricious for DHCR to permanently exempt the five apartments from the rent adjustment. The tenants of the exempted apartments intervened in the proceeding and Supreme Court denied the petition. The court concluded that the imposition of permanent exemptions was supported by DHCR’s “determination that the pointing work was not done effectively for the five exempted apartments” (2008 NY Slip Op 32125[U], *5 [2008]).

The Appellate Division affirmed, with two Justices dissenting (79 AD3d 630 [1st Dept 2010]). It held that DHCR acted rationally and did not abuse its discretion as there was ample proof that the pointing work had not been performed properly with regard to the exempted apartments. The court found that no regulation, DHCR policy or judicial precedent limited the agency to denying an MCI increase in its entirety or granting a temporary suspension of the adjustment. The Appellate Division further observed that there can be instances in which DHCR may have “ample reason to believe that [a] landlord would make (or had made) the necessary repairs in a diligent fashion” but that, on the record in this case, the agency “did not believe that [Terrace Court] intended in good faith to address the situation, especially after it vociferously denied the existence of a problem and then engaged in unsuccessful efforts to fix it” (79 AD3d at 635).

The dissenters found no rational basis for the permanent exemption of the five apartments because such a determination was alleged to be inconsistent with DHCR’s preexisting policy of temporarily suspending an MCI increase for apartments until necessary repairs are made and, in this case, the agency had not provided an adequate justification for departing from that practice.

Terrace Court appealed to this Court as of right and now challenges DHCR’s decision to permanently exempt the five apartments as arbitrary and capricious, and violative of the agency’s settled policy to temporarily suspend MCI increases until repairs are completed. According to the owner, temporary suspensions are mandated by a regulation and DHCR’s action was unreasonable as a matter of law in the absence of an explanation by the agency regarding its departure from precedent.

It is true, as a general proposition, that administrative agencies are required to follow their own precedent (see e.g. Matter of Lantry v State of New York, 6 NY3d 49, 58 [2005]) and an agency that deviates from its established rule must provide an explanation for the modification so that a reviewing court can “determine whether the agency has changed its prior interpretation of the law for valid reasons, or has simply overlooked or ignored its prior decision” (Matter of Charles A. Field Delivery Serv. [Roberts], 66 NY2d 516, 520 [1985]). The failure to provide a justification for the change requires reversal even if there is substantial evidence to support the agency’s determination (see id.).

Here, DHCR did not abandon this principle as its prior determinations in similar cases were not restricted to temporary suspensions. There have been at least several instances where the agency granted an MCI rent increase along with permanent exemptions for particular apartments, rather than issuing temporary suspensions. In one such case, DHCR disagreed with the Rent Administrator’s decision to temporarily suspend an MCI increase and instead imposed permanent exemptions. Hence, the underlying premise of Terrace Court’s contention is without merit and we reject its attempt to distinguish DHCR precedent recognizing the availability of permanent exemptions.

Nor were temporary suspensions of the MCI increase mandated by Rent Stabilization Code (9 NYCRR) § 2522.4 (a) (13). This regulation provides, in pertinent part, that DHCR should not grant an MCI rent adjustment if the owner “is not maintaining all required services,” however, the agency may grant the application “upon condition that such services will be restored within a reasonable time.” Although Terrace Court believes that “all required services” encompasses water damage repairs, DHCR interprets the phrase as referencing services that are unrelated to the MCI project. Since an agency’s interpretation of its own regulation is entitled to deference (see e.g. Matter of IG Second Generation Partners L.P. v New York State Div. of Hous. & Community Renewal, Off. of Rent Admin., 10 NY3d 474, 481 [2008]), we cannot say that DHCR’s reading of subdivision (a) (13) is irrational. In the overall context of the MCI adjustment process, DHCR is supposed to grant a rent modification if an MCI project inures to the benefit of every tenant in a building (see Rent Stabilization Law [Administrative Code of City of NY] § 26-511 [c] [6]; Rent Stabilization Code [9 NYCRR] § 2522.4 [a] [2] [i] [c]; Matter of Riverside Equities v New York State Div. of Hous. & Community Renewal, 292 AD2d 313, 313-314 [1st Dept 2002]). Subdivision (a) (13) of the regulation, in contrast, envisions situations where (unlike here) an MCI application satisfies that requirement but the landlord has failed to provide other “required services” unrelated to the MCI project. When that occurs, subdivision (a) (13) permits DHCR to encourage the restoration of those services by making that action a necessary condition of the owner’s recoupment of the funds expended on the MCI project. Because it has not been alleged that Terrace Court deprived its tenants of required services unrelated to the MCI work, the regulation has no bearing on this case.

It is therefore apparent that DHCR is not limited to temporarily suspending an MCI rent increase; the agency may permanently exempt an apartment in certain situations. Its choice is deferentially reviewed by the courts to determine whether there is a rational basis for the decision and, if so, DHCR’s conclusion must be upheld even if a court would have reached a different result (see e.g. Matter of Peckham v Calogero, 12 NY3d 424, 431 [2009], citing Matter of Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222, 231 [1974]).

In light of this standard of review, we hold that DHCR acted rationally in this case. It found that, at the time the MCI application was submitted, the five apartments at issue had defective conditions caused by moisture attributable to the MCI project and that those conditions continued in existence when DHCR inspected the apartments approximately 16 months later. On these facts, it was reasonable for the agency to conclude that those apartments did not benefit from the MCI project since they had been adversely affected by the construction work. As such, there was a sound basis for DHCR to exclude the five apartments from having to contribute to the cost of the MCI project. Consequently, under these circumstances, it was neither arbitrary nor capricious for DHCR to order permanent exemptions from the MCI adjustment rather than temporary suspensions.

DHCR claims that one of the relevant considerations in these situations is whether an owner has demonstrated good faith in diligently addressing the problems caused by an MCI. The agency apparently reasons that an owner who does so is more likely to remedy a defective condition (justifying a temporary suspension of the rent increase), whereas an owner who denies the existence of MCI-related problems or does not undertake repairs within a reasonable amount of time is unlikely to extend the benefits of the project to the affected apartments (thereby justifying a permanent exemption from the MCI adjustment). DHCR maintains that this rationale is relevant here because Terrace Court consistently denied that the MCI project caused the water damage and it did not remedy the defects during the 16-month period when the MCI application was pending. But the agency’s order did not cite this as a basis for its decision and we therefore do not consider it (see e.g. Matter of John P. v Whalen, 54 NY2d 89, 97 n 4 [1981]). In future cases where this circumstance is relevant, DHCR should articulate it in the MCI order to allow for adequate review by the courts.

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

Smith, J. (concurring).

I join the Court’s unanimous opinion, but with some misgivings.

There are a number of cases (including Matter of Little [DHCR Admin Review Docket No. NC430029RP et al. (Aug. 2, 1999)]; Matter of Bourdeau [DHCR Admin Review Docket No. TK230075RT (Mar. 9, 2006)]; and Matter of Papamichael Realty [DHCR Admin Review Docket No. UJ130059RO (May 11, 2007)]), in which DHCR has ruled that a rent increase based on a major capital improvement should be suspended as to certain apartments until particular problems are fixed. There are also a number of cases (including this one and those cited in footnote 1 of the Court’s opinion), in which DHCR has permanently exempted certain apartments from the increase. I accept the idea that both remedies are sometimes appropriate, and that DHCR has discretion to choose between them. What troubles me is that it is not easy to tell from DHCR’s decisions on what basis it is making the choice.

In this case, DHCR’s opinion is particularly unenlightening. The Commissioner says that the exemption should be permanent because various unsatisfactory conditions “existed in the apartments when work was completed just prior to the owner’s filing of the application for an MCI rent increase.” But is it not true in every case involving either a temporary or permanent exemption that a problem existed when the rent increase was applied for?

DHCR has a hard job, and courts should not make it harder by nit-picking. For this reason I join my colleagues in holding that the permanent exemption here was justified by the record. But I hope DHCR will do a better job in the future of explaining the policies and principles that guide its decisions to make exemptions from rent increases either temporary or permanent.

Chief Judge Lippman and Judges Ciparick, Read, Smith, Pigott and Jones concur with Judge Graffeo; Judge Smith concurs in a separate opinion.

Order affirmed, with costs.

      . See e.g. Matter of Various Tenants of 315 W. 57th St., DHCR Admin Review Docket No. ED 430065-RT et al., at 3; Matter of Clermont Tenants Assn., DHCR Admin Review Docket Nos. UA410049RT and UD410012RO, at 3 (Oct. 8, 2008); Matter of Sunden, DHCR Admin Review Docket Nos. BF 210190-RT & BF 230079-RT, at 2; Matter of Tenants of 27 W. 96th St. New York, NY, DHCR Admin Review Docket No. SJ430047RT, at 2 (July 10, 2000).

      . See Matter of Tenants of 27 W. 96th St. New York, NY, DHCR Admin Review Docket No. SJ430047RT, at 2 (July 10, 2000).

      . The fact that the five apartments did not benefit from the MCI project theoretically would have permitted DHCR to deny Terrace Court’s application in its entirety (see Rent Stabilization Code [9 NYCRR] § 2522.4 [a] [2] [i] [c]) and the agency’s decision to take less extreme action was not unreasonable as a matter of law.