New York State
Ethics Commission


Advisory Opinion No. 00-01: Application of Public Officers Law §§73 and 74 to a commissioner of the Public Service Commission, in his outside practice of law, representing clients in CPLR Article 78 proceedings against certain State agencies, officers and employees.

Introduction

The following advisory opinion is issued in response to a request from [ ], a commissioner of the Public Service Commission ("PSC"), inquiring about his representation of private clients in proceedings in the Supreme Court under Article 78 of the Civil Practice Law and Rules ("CPLR"). As counsel to private clients in such Article 78 proceedings, and while a full-time commissioner of the PSC, [the requesting individual] proposes to challenge the legality of certain determinations made by other New York State agencies, officers and employees.

Pursuant to the authority vested in the State Ethics Commission ("Commission") by Executive Law §94(15), the Commission renders the following advisory opinion. First, [the requesting individual] may not serve as counsel to private parties in Article 78 proceedings to the extent that such proceedings involve any of the matters specified in subparagraphs (i) through (vi) of Public Officers Law §73(7)(a). Second, under Public Officers Law §74, [the requesting individual] may not represent private parties in Article 78 proceedings against certain State agencies, and their officers or employees, that are regulated by, or regularly appear before, the PSC. These State agencies include the New York Power Authority ("NYPA"), the Long Island Power Authority ("LIPA"), the Department of Agriculture and Markets ("DAM"), the Department of Economic Development ("DED"), the Department of Environmental Conservation ("DEC"), the Department of State ("State"), the Office of Parks, Recreation and Historic Preservation ("Parks"), and the State Consumer Protection Board ("CPB").

Under this advisory opinion, [the requesting individual] may undertake to represent private parties in certain Article 78 proceedings involving State agencies or officials. [The requesting individual] should advise the Commission in writing when he undertakes to represent private clients in Article 78 proceedings against State agencies or officials. If [the requesting individual] is uncertain about whether he may engage in a proposed representation, he should consult with the Commission's staff prior to undertaking any activity.

Background

In [date], the State Senate confirmed [the requesting individual] as a commissioner of the PSC. As a commissioner of the PSC, [the requesting individual] receives a salary of $109,800 per year. In addition to serving as a PSC Commissioner, [the requesting individual] presently is [position] to [an entity which practices law].

As one of the five commissioners of the PSC, [the requesting individual] holds a position of importance to the public. It has long been recognized that "[t]he [PSC] is an administrative body established by the Legislature for the paramount purpose of protecting and enforcing the rights of the public" ( People v. Public Serv. Comm, 157 A.D. 156, 163-164, 141 N.Y.S. 1018, 1023 [3d Dept 1913]). The PSC passes on the reasonableness of prices to be charged for utility service, such as electricity, gas, water, transportation, cable television, and telephone, and promulgates rules and regulations governing the sale and distribution of such services (see, Public Service Law §4).

On [date], [the requesting individual] submitted a request to the Commission to represent private clients in CPLR Article 78 proceedings in State Supreme Court challenging the legality of determinations of New York State agencies (and officers and employees) other than the PSC. [The requesting individual] has represented that he will not seek to represent private clients that are subject to the regulatory jurisdiction of the PSC.

[The requesting individual] has not limited his request for the Commission's approval to serve as counsel to any particular private party bringing any particular Article 78 proceeding involving any specific agency. Instead, [the requesting individual] has sought the Commission's blanket approval of his continued representation of private clients in Article 78 proceedings in matters involving agencies other than the PSC. Prior to becoming a full-time commissioner of the PSC, [the requesting individual] represented approximately six clients per year in Article 78 proceedings, including in proceedings involving the New York State Department of Health ("DOH") and the New York State Education Department ("SED").

This is not the first time the Commission has acted on [the requesting individual's] request for approval of aspects of his outside law practice. On [date], the Commission formally approved [the requesting individual's] request to continue his private law practice with respect to trusts and estates and alternative dispute resolution (see, Advisory Opinion 99-12). In addition, on [date], the Commission provided an informal opinion to [the requesting individual] permitting him to engage in the private practice of law provided that: (1) each particular case or matter does not involve any State agency; (2) his client, the opposing party or any other party to the matter each has no relationship to the PSC or the Public Service Law, and is not subject to the jurisdiction of either; and (3) the Chair of the PSC has approved [the requesting individual's] outside activity.

Applicable Statutes

Public Officers Law §73(7)(a) provides:

No . . . state officer or employee, other than in the proper discharge of official duties . . . shall receive, directly or indirectly, or enter into any agreement express or implied for, any compensation, in whatever form, for the appearance or rendition of services by himself or another in relation to any case, proceeding, application or other matter before a state agency where such appearance or rendition of services is in connection with:

(i) the purchase, sale, rental or lease of real property, goods or services, or a contract therefor, from, to or with any such agency;

(ii) any proceeding relating to rate making;

(iii) the adoption or repeal of any rule or regulation having the force and effect of law;

(iv) the obtaining of grants of money or loans;

(v) licensing; or

(vi) any proceeding relating to a franchise provided for in the public service law.

Section 74, the Code of Ethics, provides minimum standards against which State officers and employees should adhere their conduct. The rule with respect to conflicts of interest is contained in subdivision 2, which provides:

No officer or employee of a state agency . . . should have any interest, financial or otherwise, direct or indirect, or engage in any business or transaction or professional activity or incur any obligation of any nature, which is in substantial conflict with the proper discharge of his duties in the public interest.

Following the rule with respect to conflicts of interests, Public Officers Law §74(3) provides standards of conduct addressing both actual and apparent conflicts of interest. Standards (a) and (d) bear on [the requesting individual's] proposed representation of private clients in Article 78 proceedings:

(a) No officer or employee of a state agency . . . should accept other employment which will impair his independence of judgment in the exercise of his official duties.

. . . .

(d) No officer or employee of a state agency . . . should use or attempt to use his official position to secure unwarranted privileges or exemptions for himself or others.

Discussion

This is a case of first impression. The Commission presumes (and the public expects) that as a commissioner of the PSC, who receives a substantial salary of $109,800 per year, [the requesting individual] devotes a substantial portion of his time to the important matters of the PSC. Indeed, §4 of the Public Service Law expressly provides, without limitation, that "commissioners shall serve on a full-time basis" (emphasis added).

[The requesting individual] has asked the Commission to provide an advisory opinion permitting his prospective representation of unspecified private clients in up to six unspecified Article 78 proceedings per year filed against unspecified State agencies and officers other than the PSC. In a vacuum, the Commission cannot determine whether [the requesting individual's] proposed Article 78 practice would violate the Public Officers Law. In this advisory opinion, the Commission will identify those provisions of the Public Officers Law that prohibit [the requesting individual] from representing private clients in Article 78 proceedings involving certain matters and/or against certain State agencies and officers.

The Commission's authority in this matter is, of course, limited by the terms of the Public Officers Law, and the Commission's own view of the ethical propriety or appearance of [the requesting individual's] proposed representation of private clients is not determinative here. The language of the Public Officers Law must control.

We note that the Legislature has expressly barred full-time salaried State officers and employees from representing private clients for compensation "against the interest of the state in relation to any case, proceeding, application or other matter before . . . the court of claims" (see, Public Officers Law §73[3][a]). The Commission has recommended, most recently in 1999, that §73(3)(a) be amended to include "any court of competent jurisdiction". The Legislature has not acted on this recommendation.

The fact that the Legislature has not seen fit (as the Commission believes it should) to amend §73(3)(a) to bar the representation of private clients in courts other than the Court of Claims does not mean that other provisions of the Public Officers Law do not apply to [the requesting individual's] representation of private clients in Article 78 proceedings. Obviously, just because one provision of the Public Officers Law does not expressly prohibit an activity does not mean that other provisions of the statute do not bar that activity. The statute must be interpreted as a whole, and all of its provisions given effect.

1. Public Officers Law §73(7)(a)

By its terms, Public Officers Law §73(7)(a) expressly bars a state officer or employee, such as [the requesting individual], from receiving compensation from private parties for appearing or rendering services "in relation to any case, proceeding, application or other matter before a state agency where such appearance or rendition of services is in connection with" the activities specified in six subparagraphs thereof, including "(iii) the adoption or repeal of any rule or regulation having the force and effect of law" or "(v) licensing".

In interpreting §73(7)(a), the Commission must be mindful of the purpose of this provision of the Public Officers Law: to prevent State officers and employees, by virtue of their position in State government, from receiving preferential treatment or undue access for their private clients before State agencies, officers and employees in relation to the matters specified in subparagraphs (i) through (vi) therein. By barring contacts by State officers and employees with respect to these specified matters, and by requiring that the matter not be ministerial (see, Public Officers Law §73[7][c]), the Legislature reflected its judgment that certain contacts involving agency discretion presented a risk of preferential treatment and undue access and should be absolutely barred.

Under §73(7)(a)(iii) and (v), for example, [the requesting individual] could not represent an opthalmic dispenser, challenging a training regulation promulgated by the SED, in an administrative proceeding before the agency, including contacting SED officials prior to the promulgation of that regulation. The matter clearly would involve "the adoption or repeal of any rule or regulation having the force and effect of law," and the "licensing" of opthalmic dispensers (see, §73[7][a][iii] and [v]). The question before the Commission is whether [the requesting individual], simply by filing an Article 78 petition, could contact the same officials to seek the reconsideration of that regulation, even though he could not do so the day before filing the petition.

Specifically, the Commission must decide whether, after the filing of an Article 78 proceeding, a matter is still "before" a State agency, or is solely and exclusively before the courts. At the outset, we note that nothing in the Public Officers Law provides that a case, proceeding, application or related proceeding may not be simultaneously "before" both a state agency and a court. The Commission interprets terms or words used in the Public Officers Law in accordance with their ordinary meaning. Black's defines "before" as: "[i]n the presence of; under the official purview of; as in a magistrate's jurat, 'before me personally appeared,'etc." (Black's Law Dictionary 140 [5th ed. 1979][emphasis added]). In relevant part, Webster's defines "before" as " being considered, judged, or decided by (the matter before the committee)" (Webster's New World Dictionary 124 [3d ed. 1989][emphasis in original]).

By filing an Article 78 proceeding, a petitioner seeks a judgment from the Supreme Court annulling or modifying the determination of a State agency, officer or employee or prohibiting some agency action (see, CPLR §7806). Although the challenged determination is now pending before the court, it also remains pending "before" the agency. At a minimum, the agency, officer or employee named as respondent in the proceeding must file an answer or move to dismiss the petition or risk the entry of judgment in favor of petitioner (see, CPLR §7804[e]). These involve discretionary decisions.

Of most significance, the filing of the Article 78 petition does not divest the State agency or official of the discretionary authority to reverse administratively the challenged determination or to settle the matter on terms acceptable to the petitioner, even if such decision is considered "final" for purposes of judicial review. If the agency or officer reconsiders its determination or action, the Article 78 proceeding is rendered moot and must be dismissed (see, e.g., Hodges v. Jones, 195 A.D.2d 647, 648, 600 N.Y.S.2d 645 [3d Dept 1993] [dismissing Article 78 proceeding as moot after determination that petitioner violated prison disciplinary rules was administratively reversed]; Nanco Environmental Servs., Inc. v. Jorling, 172 A.D.2d 1, 5, 576 N.Y.S.2d 619, 621 [3d Dept 1991] [Article 78 proceeding rendered moot after DEC abandoned use of list of laboratories eligible to perform environmental analysis for DEC or its primary contractors]; Allen Group, Inc. v. Adduci, 136 A.D.2d 803, 523 N.Y.S.2d 636 [3d Dept 1988][dismissing Article 78 proceeding because Department of Motor Vehicles withdrew contested request for proposal]).

Therefore, even though an Article 78 proceeding is pending before a court, that proceeding also remains pending before the relevant State agency or officer, because such agency or official is free to reverse or reconsider -- at any time prior to judgment -- the determination or action under review and thereby render the Article 78 proceeding moot. In other words, the resolution of the matter presented by an Article 78 proceeding remains squarely within the State agency or official's discretionary control and, therefore, is "before" the agency or official under any reasonable interpretation of that statutory term.

Moreover, the Commission believes that the rationale for the prohibition contained in §73(7)(a) -- to prevent State officers and employees from receiving preferential treatment or undue access for their private clients before State agencies with respect to certain discretionary decisions -- clearly remains following the filing of an Article 78 proceeding. Although our dissenting colleagues compare a State agency that reverses its own discretionary decision and, thereby, moots an Article 78 proceeding to a pedestrian who steps out of the way of a speeding car, the agency might just as well be compared to the driver of the car. After the filing of an Article 78 petition, as was the case the day before the filing of the petition, the agency retains the power to reverse its own decision, regardless of the likelihood that the agency's decision will be upheld by a court. In fact, the greatest public harm would occur if a State agency did not take an entirely lawful action, or reversed a determination that would be upheld in court, because a high State official was advancing the interests of private parties.

For these reasons, the Commission concludes that [the requesting individual] may not represent private clients in Article 78 proceedings for compensation in connection with those specified matters listed under Public Officers Law §73(7)(a)(i)-(vi).

2. Public Officers Law §74

Section 74 sets forth the Code of Ethics. Unlike §73(7)(a), which expressly prohibits certain specified conduct, §74 establishes certain minimum standards of conduct that State officers and employees should follow to avoid actual and apparent conflicts of interest.

The Attorney General, in commenting on the outside activities of a State employee that could lead to a conflict of interest, stated the following:

[A] public official must not only be innocent of any wrongdoing, but he must be alert at all times so that his acts and conduct give the public no cause for suspicion. He must give no appearance of a potential conflict between his official duties and personal activities even though an actual conflict is not present (1979 Opns Atty Gen 66 [emphasis added]).

We believe that two standards specified in §74(3) are relevant to [the requesting individual's] proposed representation of private clients in Article 78 proceedings: paragraph (a), which bars a State officer from "accept[ing] other employment which will impair his independence of judgment in the exercise of his official duties"; and paragraph (d), which precludes a State officer from "us[ing] or attempt[ing] to use his official position to secure unwarranted privileges or exemptions for himself or others" (emphasis added).

In the present case, the Commission believes that the perception that [the requesting individual] would receive preferential treatment for his private clients in connection with the litigation of Article 78 proceedings is greatest with respect to those State agencies and officials that are regulated by, or regularly appear before, the PSC.

As discussed above, the State agency or official complained about in the Article 78 proceeding would have a role in defending the litigation and could "moot" the proceeding by administratively reversing the determination being challenged by [the requesting individual's] client. The Commission believes that the perception reasonably exists that an agency or official that is regulated by, or regularly appears before, the PSC might make a concession to [the requesting individual] and his private clients in the hope of obtaining [the requesting individual's] vote in an unrelated PSC matter in which the agency or official had an interest (see, Public Officers Law §74[3][d]).

Moreover, a PSC commissioner is paid a full-time salary to decide important matters affecting the public. To the extent that [the requesting individual] and his private clients in Article 78 proceedings seek to annul or modify the decisions of State agencies or officials that are regulated by, or regularly appear before, the PSC, the Commission believes that the perception reasonably exists that [the requesting individual's] independence of judgment as a PSC commissioner might be adversely affected by his private practice (see, Public Officers Law §74[3][a]).

Accordingly, [the requesting individual] should not represent private parties in Article 78 proceedings involving the following agencies: NYPA and LIPA, which are subject to the regulatory authority of the PSC (see, Public Service Law §§18-a, 24-b and 126); DAM, DED, DEC, State, and Parks, which are statutory parties to certification proceedings in Article VII siting of major utility transmission facilities (see, Public Service Law §124[1]); and CPB, which regularly intervenes in PSC rate cases (see, Executive Law §553[2][c]).

In this advisory opinion, the Commission does not preclude [the requesting individual] from representing all private clients in Article 78 proceedings against all State agencies or officials. [The requesting individual] has specifically advised the Commission that his Article 78 practice includes proceedings involving SED and DOH. To the extent that his proposed representation would not involve those matters specified under Public Officers Law §73(7)(a)(i)-(vi), we believe that he may represent private parties in Article 78 proceedings involving SED or DOH. [The requesting individual] should advise the Commission in writing when he undertakes to represent private clients in Article 78 proceedings against State agencies or officials. To the extent that [the requesting individual] has a question about whether he may engage in the representation, he should consult with the Commission's staff prior to undertaking any activity.

Unlike its ruling interpreting §73(7)(a), which applies to all salaried State officers and employees, the Commission's conclusion with respect to §74 applies to the circumstances only of a salaried State agency commissioner representing private parties for compensation (as opposed to on a pro bono basis) in Article 78 proceedings. At the same time, the Commission conceives of no circumstance where a State officer or employee could represent another person or entity as a petitioner in an Article 78 proceeding against the interest of his or her own State agency, and [the requesting individual] does not seek approval to bring such a proceeding.

Conclusion

The Commission concludes that Public Officers Law §73(7)(a) would prohibit [the requesting individual] from bringing an Article 78 proceeding against any State agency or State officer or employee in connection with those matters listed in subsections (i) to (vi) thereof. In addition, the Commission determines that §74 precludes [the requesting individual] from representing petitioners in Article 78 proceedings actions against certain agencies, specified above, that are regulated by, or regularly appear before, the PSC, because of the perception of a conflict of interest were he to do so.

This opinion, until and unless amended or revoked, is binding on the Commission in any subsequent proceeding concerning the person who requested it and who acted in good faith, unless material facts were omitted or misstated by the person in the request for an opinion or related supporting documentation.

Concurring:

Robert J. Giuffra, Jr.
Henry G. Gossel
Lynn Millane, Members

Concurring in part and dissenting in part:

Paul Shechtman, Chair
O. Peter Sherwood, Member

We might well agree with the majority that maintaining a private law practice is inconsistent with the statutory obligation of a commissioner of the PSC to serve in that office on a full-time basis, and, therefore, conclude that [the requesting individual] should not be granted blanket authority to represent private clients in Article 78 proceedings against agencies of the State. However, nothing in the Public Officers Law, the Commission's only source of authority, entitles the Commission to bar [the requesting individual] from engaging in the above-described activity, except in certain limited circumstances.

We would conclude that §73 of the Public Officers Law does not bar [the requesting individual] from engaging in the above-referenced activities. However, we agree that under the Ethics Code as set forth in §74 of the Public Officers Law, [the requesting individual] should avoid representing private clients against any State agency or official that either is regulated by, or appears regularly before, the PSC. For these reasons, we dissent in part and concur in part.

  1. Application of Public Officers Law §73
  2. There can be no dispute that the Commission's authority in this and any matter before it is limited by the terms of the Public Officers Law, a proposition which the majority has recognized. Public Officers Law §73(3)(b) speaks directly to the matter of State employees receiving compensation for appearing against the interest of the State in relation to litigation in the courts. That section states:

    No statewide elected official, member of the legislature, legislative employee, full time salaried state officer or employee shall receive, directly or indirectly, or enter into any agreement expressed or implied for, [sic] any compensation, in whatever form, for the appearance or rendition of services by himself or another against the interest of the state in relation to any case, proceeding, application or other matter before, or the transaction of business by himself or another with, the court of claims.

    The provision, which was enacted in 1965, has withstood criticism and numerous attempts to broaden its scope to include appearances before any court. In his 1965 annual message, then Governor Nelson A. Rockefeller urged the Legislature to strengthen the Ethics Code by prohibiting "members of the Legislature and legislative employees from appearing against the interest of the State in any court of this State when the State is a party to action and State funds are involved". The bill which was ultimately enacted into law applied to all full-time executive branch officers and employees as well as legislators and legislative employees. The narrowly drawn provision prohibits appearances for compensation against the interest of the State in matters pending in the Court of Claims. Newspaper reports called the bill a "half a loaf", because it included only a prohibition against Court of Claims appearances and did not include prohibitions against appearances before State agencies. While the focus of criticism at the time was on appearances before State agencies, one paper also criticized the Legislature's failure to extend the prohibition to appearances before other courts.

    The Legislature overhauled the Ethics Code when it enacted the 1987 Ethics in Government Act. This legislation, which created the Commission, left the language of §73(3)(a) virtually unchanged.

    The Commission has, on several occasions, sought to broaden the scope of the prohibition contained in §73(3). In 1995, 1996, 1997 and 1999, the Commission proposed legislation that would amend the law to bar covered State officers and employees from appearing for compensation against the interests of the State in cases before "any court of competent jurisdiction." The Legislature has declined to act on any of these proposals.

    The majority correctly states that Public Officers Law §73(7)(a) bars covered State officers and employees from receiving compensation from private parties for appearing or rendering services in relation to any case, proceeding, application or other matter before a State agency where such appearance or rendition of services is in connection with the activities specified in the six subparagraphs thereof. Recognizing as it must, that §73(7) does not prohibit appearances for compensation before a court, the majority argues that a challenged agency determination that is before a court in an Article 78 proceeding nevertheless remains pending before the agency. The majority reasons that a State officer named as a respondent in an Article 78 proceeding is required to engage in a number of discretionary activities, including deciding whether or not to file an answer, whether or not to move to dismiss, or whether or not to reverse or reconsider the challenged determination prior to the time of judgment. It concludes that these are all discretionary matters which remain before the agency and provide a basis for prohibiting covered State officers and employees from appearing on behalf of private clients in Article 78 proceedings involving the six areas of activity identified in §73(7).

    With this flawed analysis, we respectfully disagree for the following reasons. First, if the Legislature wished to prohibit covered employees from appearing in Article 78 proceedings in relation to the six identified areas, it could have drafted the statute to so provide. The Legislature has elected not to do so.

    Second, the argument that the challenged determination remains pending because the affected agency remains free to reverse or reconsider the challenged determination ignores the fact that an Article 78 proceeding may only be brought to challenge a "final" determination. Having made a final determination, the matter cannot be regarded as pending before the agency.

    Third, this Commission has recognized, albeit in connection with another section of the Public Officers Law, that participation in settlement discussions in a pending litigation does not constitute an appearance before an agency prohibited by the two year bar set forth in §73(8)(a)(i). The Commission reached this conclusion even though it acknowledged that such discussions would involve direct contact with the affected agency (see, Advisory Opinion No. 89-7).

    Fourth, the decision of an agency to reverse itself or to reconsider its decision in face of an imminent adverse judicial ruling is "discretionary" only in the sense that a pedestrian who steps out of the path of a speeding vehicle "voluntarily" yields the right of way. In this regard, it is also useful to recall that in an Article 78 proceeding, a judge is not authorized to overturn discretionary decisions of a State agency. In such a proceeding, the court may disturb a decision of a State agency only where the body (or officer) fails to perform a duty enjoined upon it by law, acts without or in excess of its jurisdiction, or renders a determination which is in violation of law, is arbitrary and capricious, or constitutes an abuse of discretion, or in a matter where a hearing was held, the determination is not supported by substantial evidence (see, CPLR §7803). In short, in an Article 78 proceeding, questions relating to the discretionary authority of the decision maker are not at issue. Rather, the question is whether or not the agency determination violates the law.

  3. Application of Public Officers Law §74
  4. Applying the Code of Ethics as set forth in Public Officers Law §74, the majority opinion lays down a set of guidelines regarding [the requesting individual's] representation of private clients in Article 78 proceedings against State agencies and officials that are regulated by or regularly appear before the PSC. We agree that §74 applies in such circumstances and that these guidelines are appropriate. To this extent we concur with the majority opinion.

Dated: February 3, 2000



URL: http://www.nysl.nysed.gov/edocs/ethics/00-01.htm