New York State
Ethics Commission


Advisory Opinion No. 95-16: Application of the lifetime prohibition contained in Public Officers Law §73(8) to a former employee of the Department of Public Service and the Consumer Protection Board.

INTRODUCTION

The following advisory opinion is issued in response to a request by [], a former employee of the New York State Department of Public Service and the State Consumer Protection Board, for an advisory opinion regarding how the lifetime bar contained in Public Officers Law §73(8)(b) may restrict her ability to practice law in certain utility cases.

Pursuant to the authority vested in it by Executive Law §94(15), the State Ethics Commission ("Commission") hereby renders its opinion that: (1) [the requesting individual] may not appear in the future in the Public Service Commission's ("PSC") Affiliates Transaction Proceeding (Case No. 90-C-0912) or represent parties in any court action challenging a final determination of the PSC in that proceeding because of her prior representation of the PSC in court actions arising out of the proceeding; (2) her involvement in an Article 78 proceeding challenging the PSC's determination in Case No. 90-C-1148 does not preclude her from representing a party to PSC Cases No. 92-C-0451 and 92-C-1249 in any future court challenge to determinations that the PSC may make in those cases; and (3) she may render compensated services in connection with PSC Case No. 94-C-0665, as she was neither directly concerned with nor personally participated in that proceeding.

BACKGROUND

[The requesting individual] previously held the position of Assistant Counsel in the Office of General Counsel in the Department of Public Service ("Department"), serving as a litigator, from November 1991 to December 1993. After leaving that position, she was employed by the Consumer Protection Board ("CPB") as a Utility Intervenor Attorney. On May 1, 1995, [the requesting individual] entered the private practice of law when she joined the law firm of [] in an "Of Counsel" position. She will be practicing in the utility law field and hopes to develop a telecommunications practice, but she has no specific utility clients at this time. [The requesting individual] seeks an advisory opinion relating only to lifetime bar issues.(1)

The Department is established under the Public Service Law, which also establishes the PSC in the Department. The PSC consists of five members appointed by the Governor with the advice and consent of the Senate. The Chair of the PSC is designated as the chief executive officer of the Department.(2)

The Office of General Counsel at the Department is comprised of "staff attorneys", "advisory attorneys" and "litigators". Staff attorneys represent Department staff and appear on behalf of the Department in rate cases and rulemaking proceedings, usually before an Administrative Law Judge ("ALJ"). An ALJ's recommended decision is presented to the PSC for final agency determination, which is subject to review by way of an Article 78 proceeding.(3)

Advisory attorneys do not appear in rate cases or proceedings, but, rather, advise the PSC Commissioners on issues before them.

Litigators, who hold the position of Assistant Counsel, are distinct from staff attorneys and advisory attorneys. They do not appear in administrative proceedings. As a litigator, [the requesting individual]'s role was to represent the PSC in state and federal court.

CPB Utility Intervenor Attorneys appear both in PSC proceedings and in Court in cases where the CPB is authorized to intervene.

[The requesting individual] asks several questions regarding the application of the lifetime bar in the specific situations described below.

APPLICABLE LAW

Public Officers Law §73(8)(b) states, in relevant part, that: No person who has served as a state officer or employee shall after the termination of such service or employment appear, practice, communicate or otherwise render services before any state agency or receive compensation for any such services rendered by such former officer or employee on behalf of any person, firm, corporation or other entity in relation to any case, proceeding, application or transaction with respect to which such person was directly concerned and in which he or she personally participated during the period of his or her service or employment, or which was under his or her active consideration.

This provision, part of what is generally referred to as the "revolving door" provision, sets forth the ground rules for what individuals may do with the knowledge, experience and contacts gained from public service after they terminate their employment with a State agency.(4) They are prohibited from appearing, practicing, communicating or otherwise rendering services before any State agency, or receiving compensation for such services rendered anywhere, in relation to any case, proceeding, application or transaction involving a matter in which they were directly concerned and personally participated or which was under their active consideration while in State service.

QUESTION 1(5)

FACTS

In 1990, the PSC commenced Case No. 90-C-0912, known as the "Affiliates Transaction Proceeding". This proceeding was intended to determine whether New York Telephone Company ("NYT") engaged in improper business practices harmful to ratepayers, particularly with respect to certain conventions held in Florida. The matter was assigned to an ALJ. Parties to the proceeding included the Department, which hired a consulting firm, Liberty Consulting ("Liberty") to conduct an audit of NYT's affiliates transactions, as well as intervenors, including the CPB, the Department of Law ("DOL") and former employees and suppliers of NYT. This proceeding was commenced before [the requesting individual]'s appointment to the Department, and presently remains open.

During the course of the proceeding, NYT shared materials relating to an internal security report with Department staff and its consultant, but it denied access to the other parties. A dispute arose, and NYT moved before the ALJ for an order of protection, arguing that it could provide the materials to Department staff while otherwise maintaining their confidentiality. The ALJ ruled that some material was subject to disclosure, but issued an order of protection with regard to the remaining material. Both sides appealed to the PSC, which ruled that all of the material was subject to disclosure. NYT then commenced an Article 78 proceeding in Supreme Court, Albany County.

[The requesting individual] was assigned as the attorney to defend the PSC in the State Supreme Court proceeding. Her role was to defend the PSC's ruling in favor of the intervenors. The Court confirmed the PSC's order, and no further appeal was taken.

Several months later, a similar situation arose in a dispute focused on NYT's claim that the security report and certain related materials were subject to the attorney-client and work-product privileges. NYT attempted to commence a second Article 78 proceeding by way of an order to show cause, and [the requesting individual] again defended the PSC in court. The Court ultimately denied NYT's application for an order to show cause. During the course of the two Article 78 proceedings in State court, the underlying administrative proceeding continued.

In 1993, after [the requesting individual] had left the Department and moved to the CPB, the Department informed the PSC in a public session that NYT had improperly obtained the workpapers and draft audit results of Liberty, the Department's consultant. On behalf of the CPB, [the requesting individual] filed a motion with the PSC seeking access to the materials under FOIL and on the ground of res judicata, citing the discovery disputes which were the subject of the previous Article 78 proceedings. While this motion was pending, the PSC decided to commence its own investigation of the Liberty matter separate from the pending proceeding. It opened a new proceeding -- Case No. 94-C-0360, "Investigation of the Improprieties of New York Telephone Company in Case No. 90-C-0912" -- and assigned a different ALJ.

Since it was not clear in which proceeding the CPB's motion would be considered, the caption of the motion identified every open proceeding involving New York Telephone. When [the requesting individual]'s motion was decided, it was treated as motion in the Liberty Proceeding (Case No. 94-C-0360). The PSC ultimately issued a more restrictive order of protection governing access to materials in this proceeding. The Liberty proceeding is now complete and the report is public. The Affiliates Transaction Proceeding (Case No. 90-C-0912) remains open.

QUESTIONS PRESENTED

[The requesting individual] asks the following questions:

(a) whether her appearances in court or her motion filed in several proceedings but decided in another proceeding prohibit her from appearing in the future in the Affiliates Transaction Proceeding (Case No. 90-C-0912); and

(b) whether she may represent any of the parties to the Affiliates Transaction Proceeding in any court proceeding challenging a final PSC determination.

DISCUSSION

The lifetime bar prohibits [the requesting individual] from ever participating in any proceeding in which she was directly concerned and personally participated or which was under her active consideration while in State service. The first question before the Commission is whether [the requesting individual]'s appearances in the Article 78 proceedings arising out of the Affiliates Transaction Proceeding constitutes her participation in the latter. If it does, she is barred from any future participation in the PSC proceeding.(6)

[The requesting individual] personally appeared in court on two occasions to defend determinations which the PSC had made in the Affiliates Transaction Proceeding. While she may not have appeared before the PSC, she nonetheless personally participated in the Proceeding by serving as a litigator in her position as a member of the Department's Office of General Counsel and by defending in court the PSC's determinations in the underlying proceeding. While the issues in the court proceedings were narrow, [the requesting individual] may well have acquired substantial knowledge of the facts of the underlying proceeding in order to prepare her case. As an attorney, she was in a position to share privileged information as broadly as was necessary to advocate her position. In addition, she could have participated in various discussions with attorneys for the other parties, including possible settlement discussions. Thus, the Article 78 proceedings and the underlying Affiliates Transaction Proceeding cannot be severed so as to stand independently of each other. Therefore, the Commission determines that [the requesting individual], by defending the PSC determinations in court, should be deemed to have personally participated in the Affiliates Transaction Proceeding. She may not appear in that proceeding in the future.(7)

[The requesting individual] further asks whether she may appear in court proceedings after a final PSC determination is issued in the Affiliates Transaction Proceeding. In Advisory Opinion No. 92-22, a former employee was prohibited from receiving compensation in a federal or State court proceeding where he personally participated in the transaction underlying the litigation during his State employment. In this case, since the Commission has determined that [the requesting individual] personally participated in the Affiliates Transaction Proceeding, she may not receive compensation for services in any federal or State court action arising out of that Proceeding.(8)

QUESTION 2

FACTS

[The requesting individual] asks whether she may represent mass announcement service ("MAS") providers in Case No. 92-C-0461 or 92-C-1249, or in any court proceeding arising out of them. She has never been involved in either proceeding. Her concern arises because of her participation in an Article 78 proceeding and settlement arising out of another PSC proceeding, the Billing and Collection Proceeding (Case No. 90-C-1148).

MAS providers are currently challenging before the PSC their placement in a category with adult line providers (Cases No. 92-C-0461 and 92-C-1249). In the 1980's, the PSC established four customer-selected blocking categories, with the fourth category being the least regulated and protected service. Adult line providers were placed in this category, as were MAS providers, which provide recorded information such as the time, weather, lottery results, and horoscope announcements. The result of MAS providers being placed in the same category as adult line providers is that if a customer wishes to prohibit his or her phone from being used to call a 1-900 adult line, the phone is also blocked from dialing time or weather announcements.

As noted above, MAS providers are currently challenging their placement with adult line providers in the fourth category in Cases No. 92-C-0451, "Proceeding on the Motion of the Commission to Review Rates, Charges, Rules and Regulations of New York Telephone Company Affecting the Information Provisioning Industry" and No. 92-C-1249, "Proceeding on Motion of the Commission Concerning Tariff Revisions to Delete Provisions Pertaining to Charging Interexchange Carriers for Calls to Certain Community Information Service Numbers".

In a different proceeding (Case No. 90-C-1148), the PSC promulgated regulations governing billing and collection. NYT acts as the billing agent for many companies, including major long-distance carriers and MAS providers. Various segments of the telecommunications industry, including long-distance carriers but not MAS providers, challenged the PSC's regulations in an Article 78 proceeding. [The requesting individual] was actively involved in this proceeding, which resulted in a settlement and voluntary discontinuance in court. Thereafter, she was actively involved in a subsequent dispute over the meaning of a provision of the settlement concerning when a customer's payment is deemed received by the telephone companies.(9)

The regulations and the settlement established the rules regarding termination of telephone services for non-payment by a customer. Prior to the regulations and settlement, a customer who made partial payments sufficient to cover the cost of basic local service could still have service terminated for failure to pay, inter alia, long distance charges. Termination was achieved by blocking and was based on the customer-selected blocking categories established as described above.

As a result of the settlement of the Article 78 proceeding, basic local service, which is the first of the four blocking categories, may not be terminated for failure to pay telephone charges in the other three categories. The Article 78 proceeding did not involve or challenge the categorization of the various services, including the MAS services. Rather, it concerned: (1) allocation of customer payments (i.e. should partial payments be applied first to basic service or should portions of partial payments be applied to other services); (2) the elimination of a local exchange carrier's right to terminate basic service for failure to pay other services; and (3) the timing in the billing and collection regulations.

QUESTION PRESENTED

[The requesting individual] asks whether her representation of the PSC in the Article 78 proceeding which challenged the PSC's determination in the Billing and Collection Case would preclude her representation of MAS providers or any other parties in challenging the categories established in the 1980's in ongoing Cases No. 92-C-0451 and 92-C-1249 and any court proceedings arising out of those cases.

DISCUSSION

Because [the requesting individual] did not personally participate in PSC Cases No. 92-C-0451 and 92-C-1249, the lifetime bar does not prohibit her from representing MAS providers in those cases or in any subsequent court action challenging a final determination of the PSC. The Article 78 proceeding in which [the requesting individual] defended the PSC's determination in the Billing and Collection Case did not involve MAS providers, as the issues argued centered on a consumer's right to protection of basic services when other services were unpaid. This is significantly different from the ongoing challenge to the established blocking categories. The fact that these categories were used as a basis to settle billing issues does not mean that [the requesting individual] is precluded from representing MAS providers in their challenge to the categories. Clearly, the PSC proceedings are not the same; and the issues are sufficiently different so as to conclude that the transactions are not the same.

QUESTION 3

FACTS

While at the CPB, working as a Utility Intervenor Attorney, [the requesting individual] was assigned to Case No. 92-C-1159, "An Operational Audit of New York Telephone Company's Service Quality Standards". This proceeding resulted in a draft audit report on which [the requesting individual] filed comments on behalf of the CPB.

While this case was pending, the ALJ in another PSC proceeding, Case No. 94-C-0665, "New York Telephone Company Rate Incentives Proceeding", scheduled a negotiating session regarding proposed provisions to govern NYT's future service quality. Certain "exploratory" sessions were scheduled to determine whether additional issues could or should be rolled into Track II of that case. Because of [the requesting individual]'s awareness of NYT's prior service quality problems as a result of her participation in the draft audit case, the CPB attorney handling the incentives case requested that she sit in with him on one or two sessions to hear NYT's presentations and to advise him as to whether NYT's assertions were consistent in both cases. [The requesting individual] did not comment on or file remarks on this issue or any other issue in Case No. 94-C-0665, nor did she have any input into the CPB's position concerning the proposed plan or service quality components at issue in that case.(10)

[The requesting individual] states that to the best of her recollection, she was present as an observer at portions of two or three exploratory sessions in the year-long negotiations conducted in the incentives case and spoke very little. She recalls suggesting to Department staff that they consult with their auditors in the service quality audit to understand NYT's historical service quality problems in order to consider how to address the issue in the future, but she recalls no other internal discussions.

QUESTION PRESENTED

May [the requesting individual] render compensated service in connection with PSC Case No. 94-C-0665 (the Incentives case) which remains open?

DISCUSSION

In order to answer the question posed, the Commission must determine whether [the requesting individual]'s involvement rises to the level of "direct concern and personal participation" in the proceeding so as to bar her from rendering future services.

It is clear that personal participation and direct concern in a specific case require more than an awareness of or informal conversation concerning the circumstances (Advisory Opinion No. 89-3). Indeed, the Commission has had occasion to state that "[m]ere presence in a room, without any evidence of substantive involvement or participation, is not either direct concern and personal participation or active consideration of a matter in relation to a transaction, case, application or proceeding and does not establish facts which trigger the lifetime bar" (Advisory Opinion No. 90-16). In Advisory Opinion No. 93-13, the Commission stated that what is decisive to a finding of whether a former employee personally participated in and was directly concerned with or actively considered a transaction is whether the former employee had some official State role in effecting the outcome of the transaction. In that case, the Commission held that while the employee "was certainly interested in the outcome" of the transaction, his interest did not rise to the level of direct concern and personal participation or active consideration necessary to invoke the lifetime bar because his role "was not one of an active participant or a decision maker" (see also, Advisory Opinion No. 95-07).

Based on the facts presented here, the Commission concludes that [the requesting individual]'s involvement in Case No. 94-C-0665 did not rise to the level of "direct concern and personal participation" or "active consideration" so as to bar her from rendering future services in connection with the case. Her presence as an observer at portions of two or three sessions which were part of the year-long negotiations and her suggestion to Department staff that they should consult with their auditor in the earlier case does not constitute her personal participation. She is, therefore, not prohibited from rendering services for compensation in Case No. 94-C-0665.(11)

CONCLUSION

The Commission concludes that: (1) [the requesting individual] may not appear in the future in the PSC's Affiliates Transaction Proceeding (Case No. 90-C-0912) or represent parties in any court action challenging a final determination of the PSC in that proceeding because of her prior representation of the PSC in court actions arising out of the proceeding; (2) her involvement in an Article 78 proceeding challenging the PSC's determination in Case No. 90-C-1148 does not preclude her from representing a party to PSC Cases No. 92-C-0451 and 92-C-1249 in any future court challenge to determinations that the PSC may make in those cases; and (3) she may render compensated services in connection with PSC Case No. 94-C-0665, as she was neither directly concerned with nor personally participated in that proceeding.

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 opinion or related supporting documentation.

All concur:

Joseph M. Bress, Chair

Barbara A. Black,
Angelo A. Costanza,
Robert E. Eggenschiller, Members

Donald A. Odell abstained.

Dated: May 31, 1995


Endnotes

1. She is not seeking an opinion at this time regarding the two year bar.

2. Public Service Law §§3, 4

3. The term "Article 78 proceeding" refers to a proceeding commenced in the State court system pursuant to Article 78 of the Civil Practice Law and Rules to review a State agency determination.

4. There is also a two year bar which is absolute with respect to appearing, practicing or receiving compensation for services rendered before a State agency that employed a former employee. As previously noted, [the requesting individual] is not seeking an opinion with regard to the two year bar.

5. [The requesting individual] also asks a question 4 related to the same proceeding discussed in this section. The responses are combined herein. [The requesting individual] further posed a fifth question to which the Commission responded by informal opinion dated May 17, 1995.

6. See, Advisory Opinion No. 93-18, in which the Commission held that the lifetime bar prohibits a former employee from ever participating as a party in an administrative proceeding, whether or not for compensation, in a case in which he or she personally participated and was directly concerned.

7. Since the Commission has determined that [the requesting individual] personally participated in the Affiliates Transaction Proceeding by defending in court determinations of the PSC, it need not decide whether she personally participated in the proceeding by virtue of having filed a motion for discovery in the Liberty matter which included in the caption a reference to the proceeding.

8. Cf., Advisory Opinion No. 89-7, in which the Commission held that the two year bar did not prohibit a former employee from participating in the settlement of a State or federal court action even if settlement negotiations require direct contact with the former agency's staff, because the matter is before the court, not the agency. Since that opinion dealt with a two year bar issue, the central question was whether the matter was before the former agency. In a lifetime bar case, the central question is whether the proceeding on which the former employee is now working is the same proceeding on which he or she worked while in State service. In Advisory Opinion No. 89-7, it was noted that the lifetime bar, unlike the two year bar, would apply before a court, and thus a former State employee would be prohibited from appearing in court in any proceeding in which he or she personally participated while in State service.

9. [The requesting individual] notes that the regulations have not been updated in light of the settlement, but does not seek an opinion at this time as to any lifetime bar issues relating to the promulgation of new billing and collections regulations.

10. [The requesting individual] also sat in as an observer in another negotiating session concerning NYT's improper access to the Liberty materials discussed in question 1, infra. That issue was never incorporated in Case 94-C-0665.

11. We do not address in this opinion the extent to which the provisions of the Code of Professional Responsibility might affect [the requesting individual], as the Code is beyond the purview of the Commission.



URL: http://www.nysl.nysed.gov/edocs/ethics/95-16.htm