New York State Court of Claims

New York State Court of Claims

CARVER v. STATE OF NEW YORK, #2009-015-160, Claim No. 115813, Motion No. M-75818


Synopsis


Putative class action was dismissed for lack of subject matter jurisdiction. Court of Claims has no jurisdiction to review determination by the Division of Lottery to withhold a portion of the lottery proceeds as credit for public assistance benefits paid.

Case Information

UID:
2009-015-160
Claimant(s):
WALTER E. CARVER, individually and on behalf of those similarly situated
1 1.By Order dated December 9, 2008 the caption was amended sua sponte to reflect the only properly named defendant.
Claimant short name:
CARVER
Footnote (claimant name) :

Defendant(s):
STATE OF NEW YORK
Footnote (defendant name) :
By Order dated December 9, 2008 the caption was amended sua sponte to reflect the only properly named defendant.
Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
115813
Motion number(s):
M-75818
Cross-motion number(s):

Judge:
FRANCIS T. COLLINS
Claimant’s attorney:
Richard D. Lamborn, Esquire
Defendant’s attorney:
Honorable Andrew M. Cuomo, Attorney General
By: Joan Matalavage, EsquireAssistant Attorney General
Third-party defendant’s attorney:

Signature date:
May 4, 2009
City:
Saratoga Springs
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision

Defendant moves to dismiss the claim pursuant to CPLR 3211 on the grounds the Court lacks jurisdiction over certain causes of action and that the claim is untimely and otherwise fails to state a cause of action. This putative class action on behalf of the claimant and those similarly situated alleges various constitutional and statutory violations arising out of a determination by the Office of Temporary and Disability Assistance (OTDA) to withhold a portion of his lottery winnings as reimbursement for public assistance benefits paid in the preceding ten years. Claimant received a total of $10,736.00 in public assistance benefits from the State of New York during the period September 5, 1997 through March 4, 2000 (see letter dated December 21, 2007 from General Counsel for OTDA annexed to petition, defendant's Exhibit C). After winning a $10,000.00 prize in the New York State Lottery, claimant was notified that $5,000.00 of the lottery prize money would be retained by the State and credited toward past public assistance benefits pursuant to Social Services Law § 131-r (1) which states, in part, the following:
"Any person who is receiving or has received, within the previous ten years, public assistance pursuant to the provisions of this article, and who wins a lottery prize of six hundred dollars or more shall reimburse the department from the winnings, for all such public assistance benefits paid to such person during the previous ten years, provided, however, that such crediting to the department shall in no event exceed fifty percent of the amount of the lottery prize. . . "

Claimant alleges that he was required to participate in the Work Experience Program (WEP) (see Social Services Law § 336) in exchange for public assistance and that the interception and withholding of the lottery proceeds therefore violated both the New York State and Federal Constitutions as well State and Federal minimum wage laws.

Tax Law § 1613-b (1)[2] requires an agreement between the division of the lottery and OTDA setting forth the procedures for crediting lottery prizes against public assistance paid and Tax Law § 1613-b (3) states the following:
"For each lottery prize winner identified on such notice as an individual, who is receiving or has received, within the last ten years, public assistance benefits, the lottery division shall credit to the office of temporary and disability assistance such amount of the prize to satisfy the amount of public assistance benefits indicated as received within the previous ten years, and any remainder shall be awarded to the prize winner; provided, however, that in no event shall such credit to the office of temporary and disability assistance exceed fifty percent of any such lottery prize."

With respect to notification requirements, Tax Law § 1613-b (5) requires that the lottery division notify a prize winner of the total amount of the lottery prize winning to be credited against public assistance benefits paid and the amount of the remainder to be paid to the prize winner. This subdivision also states that the "notice shall further advise the prize winner that the office of temporary and disability assistance shall provide separate notice, in writing, to the prize winner of the procedure for and time frame by which the prize winner may contest such crediting." Accordingly, Tax Law § 1613-b (6) requires that OTDA notify the prize winner of the following:
"The office of temporary and disability assistance shall notify the prize winner in writing, of the amount of such prize winning to be credited against public assistance benefits and the procedure and time frame by which the prize winner may contest such crediting. Such procedure shall include the address and telephone number of the office of temporary and disability assistance and who the prize winner may contact with respect to correction of any error in such crediting concerning such individual's liability for public assistance benefits or with respect to payment of such liability."

The thrust of the instant claim is that claimant and other putative class members, as WEP participants, were employees of the defendant and "[b]y confiscating a portion of their lawfully received lottery winnings and/or wages worked for, Defendants have failed to pay both the claimant, and those similarly situated, minimum wage" for hours worked as required by 29 USC § 206, Labor Law § 652 and Social Services Law § 336-c (2) (b)[3] (see defendant's Exhibit B, claim, ¶ ¶ 10 [f] and [g]). In addition, claimant alleges the defendant's actions also violated the Fifth and Fourteenth Amendments to the United States Constitution and article 1, § § 6, 7 and 11 of the New York State Constitution. He also alleges that the notice received from OTDA failed to inform the claimant of the address, telephone number and identity of an individual the claimant could contact with respect to the correction of any error in such crediting as required by Tax Law § 1613-b (6).

The primary jurisdiction of the Court of Claims is limited to actions seeking money damages against the State in appropriation, contract or tort (Court of Claims Act § 9[2]; Psaty v Duryea, 306 NY 413, 417 [1954]). While the Court "may apply equitable considerations and perhaps, to some extent, may grant some sort of incidental equitable relief ... the Court of Claims has 'no jurisdiction to grant strictly equitable relief...with the return of money to follow as a consequence of the equitable relief, if granted' " (Ozanam Hall of Queens Nursing Home v State of New York, 241 AD2d 670, 671 [1997] [citations omitted]).

The threshold question in determining whether the Court of Claims has subject matter jurisdiction is "[w]hether the essential nature of the claim is to recover money, or whether the monetary relief is incidental to the primary claim" (Matter of Gross v Perales, 72 NY2d 231, 236 [1988]; see also Guy v State of New York, 18 AD3d 936 [2005]). "The second inquiry, regardless of how a claimant categorizes a claim, is whether the claim would require review of an administrative agency's determination - which the Court of Claims has no subject matter jurisdiction to entertain, as review of such determinations are properly brought only in Supreme Court in a CPLR article 78 proceeding" (City of New York v State of New York, 46 AD3d 1168, 1169 [2007]; citing Hoffman v State of New York, 42 AD3d 641, 642 [2007] and Matter of Scherbyn v Wayne-Finger Lakes Bd. of Coop. Educ. Servs., 77 NY2d 753 [1991]; see also Sidoti v State of New York, 115 AD2d 202, 203 [1985]; Schaffer v Evans, 86 AD2d 708, 709 [1982], affd 57 NY2d 992 [1982]). Thus, where the monetary relief sought cannot be awarded without reviewing an underlying administrative determination, the dispute is governed by article 78 (see Matter of Salahuddin v Connell, 53 AD3d 898 [2008]; Berrian v State of New York, 45 AD3d 995 [2007]).

In Buonanotte v New York State Off. of Alcoholism & Substance Abuse Servs. , 60 AD3d 1142 [2009] the Appellate Division, Third Department, recently restated this principle in the context of a claim alleging various constitutional violations and fraud arising out of the administrative revocation of the operating certificates for claimants' substance abuse outpatient facilities. The Court held that regardless of the manner in which the claimant characterized the claim, the gravamen of the dispute was the administrative determination to revoke its operating certificates. "Whether claimants are entitled to monetary relief as a result thereof is dependent on whether [the administrative agency] failed to follow proper protocol or otherwise acted improperly in revoking the operating certificates" (id. at 1144).[4]

In the instant matter, claimant's action seeks to challenge the constitutionality and legality of an administrative determination to withhold his lottery prize winnings. Notwithstanding claimant's characterization of the claim, the essential nature of the dispute is equitable in nature requiring review of an administrative determination with incidental monetary relief to follow should the relief requested be granted. As stated by the Court in Madura v State of New York, (12 AD3d 759, 761 [2004], lv denied 4 NY3d 704 [2005]) this case is a "quintessential example of a dispute governed under CPLR article 78" (see also Harvard Fin. Servs. v State of New York, 266 AD2d 685 [1999]). Inasmuch as this Court lacks subject matter jurisdiction to annul an administrative determination, the claim must be dismissed.
Additionally, the Court of Claims lacks jurisdiction to determine alleged violations of the Federal Constitution (see Brown v State of New York, 89 NY2d 172 [1996]; Will v Michigan Dept. of State Police, 491 US 58 [1989]). Furthermore, the availability of alternative avenues of redress, both in the Supreme Court pursuant to article 78, and in the Federal system, render consideration of the claimant's tort cause of action premised upon alleged violations of the New York State Constitution unnecessary (see Martinez v City of Schenectady, 97 NY2d 78, 83 [2001]; Brown v State of New York, supra ). Finally, the availability of alternative remedies render consideration of claimant's constitutional tort claim unnecessary to ensure full realization of his constitutional rights.

Accordingly, the defendant's motion to dismiss the instant claim is granted and the claim is dismissed.


May 4, 2009
Saratoga Springs, New York

HON. FRANCIS T. COLLINS
Judge of the Court of Claims


The Court considered the following papers:
  1. Notice of motion dated November 12, 2008;
  2. Affidavit of Joan Matalavage sworn to November 12, 2008 with exhibits;
  3. Affirmation of Richard D. Lamborn dated January 6, 200[9] with exhibits;
  4. Memorandum of law of Richard D. Lamborn dated January 6, 200[9]
  5. Reply affidavit of Joan Matalavage sworn to February 2, 2009.

[2]. Tax Law § 1613-b was amended effective August 15, 2007 to reflect the change in the name of the Department of Social Services to the Office of Temporary and Disability Assistance.

[3]. Social Services Law § 336-c (2) (b) limits the number of hours a WEP participant may work as follows:
"The number of hours a participant in work experience activities authorized pursuant to this section shall be required to work in such assignment shall not exceed a number which equals the amount of assistance payable with respect to such individual (inclusive of the value of food stamps received by such individual, if any) divided by the higher of (a) the federal minimum wage provided that such hours shall be limited as set forth in subdivision four of section three hundred thirty-six of this title, or (b) the state minimum wage . . . "

[4]. A proceeding pursuant to CPLR 7803 (3) is the appropriate remedy where an act of an administrative agency is challenged on the ground that it "was made in violation of lawful procedure, was affected by an error of law or was arbitrary and capricious or an abuse of discretion". This includes claims challenging the constitutionality of an administrative act (see generally Matter of Scherbyn v Wayne-Finger Lakes Bd. of Coop. Educ. Servs., 77 NY2d at 757-758; supra; Wechsler v State of New York, 284 AD2d 707 [2001]; lv denied 97 NY2d 607 [2001]; Aubin v State of New York, 282 AD2d 919, lv denied 97 NY2d 606 [2001]; Federation of Mental Health Ctrs. v DeBuono, 275 AD2d 557 [2000]). To the extent claimant challenges the constitutionality of a statute, a declaratory judgment action against the State in the Supreme Court is the appropriate remedy (see Cass v State of New York, 58 NY2d 460 [1983]).