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Mill River Club, Inc. v. New York State Division of Human Rights

February 10, 2009


Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.


(Index No. 3232/07)


Proceeding pursuant to Executive Law § 298 to review a determination of the Commissioner of the New York State Division of Human Rights dated December 26, 2006, which, after a hearing, found, inter alia, that the petitioner's membership admissions policy discriminated against applicants on the basis of creed in violation of Executive Law § 296(2)(a).

ADJUDGED that the determination is confirmed, the petition is denied, and the proceeding is dismissed on the merits, with one bill of costs to the respondents appearing separately and filing separate briefs.

The petitioner, Mill River Club, Inc. (hereinafter the club), is a not-for-profit corporation which operates a country club in Oyster Bay. The club offers its members various amenities, including a golf course, swimming pool, tennis courts, and a club house for dining and hosting social functions. It is undisputed that since its founding in 1964, the club has maintained a "balanced membership policy," whereby it seeks to ensure that half of its members are of the Jewish faith, and half are Christians. To this end, the club admits applicants to membership only when a space opens up for a person of his or her religion, which can result in an otherwise acceptable applicant waiting as long as five or six years for membership.

In October 2002 club member Joseph Pezza filed a complaint with the New York State Division of Human Rights (hereinafter the SDHR), alleging that the club's practice of enforcing a religious quota system for applicants violated the Human Rights Law (Executive Law art 15), which, inter alia, prohibits discrimination by a place of public accommodation "because of . . . creed" (Executive Law § 296[2][a]). In its answer, the club claimed that it was not subject to the provisions of the Human Rights Law because it was a "distinctly private" organization within the meaning of Executive Law § 292(9). The club also contended that Pezza lacked standing to challenge its admissions policy, and that the relief sought by him would violate the constitutional rights of other club members.

At an administrative hearing conducted in July 2005, Pezza testified that, in accordance with the club's membership policy, every member of the club was labeled as "J" for Jewish, "C" for Christian, "M" if part of a couple of mixed religious faith, or "O" for other. Those labeled "M" or "O" were counted as Christians for purposes of determining the religious composition of the club's membership. In order to maintain a 50% Jewish and 50% Christian membership, applicants would have to wait for a space to open up for a person of his or her religious denomination, which could result in being placed on a waiting list for a significant period of time. The club has also sought to maintain its balanced membership by lowering the initiation fee for one group or the other in order to attract members of the sought-after religious community. Pezza further testified that the religious quota system also applied to individuals who were "house members" and wanted to upgrade to full membership in the club, and that one such member had complained of initiation fees increasing while he waited for full membership slots to open up for those of his religious denomination. According to Pezza, placing prospective members on a waiting list harmed all members financially, because it delayed payment of initiation fees and membership dues which would provide the club with revenue, and lower or eliminate the need to assess existing members to close revenue gaps. Pezza also testified that the club's policy embarrassed him because "it puts unnecessary labels on people."

A number of other club members also gave testimony relevant to the issue of whether the club was a distinctly private organization outside of the scope of the Human Rights Law. The testimony of these witnesses indicated that the club has between 300 and 400 members in various membership categories. In order to join the club, an applicant must, inter alia, be sponsored by an existing member, undergo a background check, have dinner with a member of the Admissions Committee, and be interviewed by members of the full Admissions Committee. Members of the club are permitted to invite nonmembers to use its dining and recreational facilities as guests, and may sponsor events for nonmembers. Members have sponsored a variety of social events for nonmembers, including weddings, birthday parties, anniversary parties, and bridal or baby showers. Members have also sponsored golf and tennis outings to raise money for a variety of nonmember institutions, including the Girl Scouts, the Coalition Against Child Abuse and Neglect, and the State University of New York at Farmingdale. On one occasion, a former club president sponsored a fund-raiser for a local politician. Nonmembers pay the club directly for the cost of these events, and the club provides services such as food, alcohol, and wait-staff. The club earned the sum of $264,043.07 in revenue from nonmember events in 2002, $265,854.17 in 2003, and $196,885.78 in 2004.

The evidence presented at the hearing also reveals that the club employs golf and tennis professionals to give lessons, and that both members and nonmembers are permitted to take lessons from these individuals. In addition, the club earns revenue from golf and tennis shops on its premises which sell equipment and clothing, and are open to members and nonmembers alike.

On August 7, 2007, the administrative law judge (hereinafter ALJ) who had presided over the hearing issued findings of fact and a recommended order. Although the ALJ found that Pezza did not have standing to file a discrimination complaint against the club since he had not been denied membership, the ALJ concluded that the SDHR had standing to commence the proceeding on its own behalf since it had been granted broad police powers to protect against unlawful discrimination. The ALJ also found that the club was a place of public accommodation subject to the Human Rights Law, and that its balanced membership policy constituted a violation of that statute.

In a final order dated December 26, 2006, the Commissioner of the SDHR (hereinafter the Commissioner) rejected the ALJ's finding that Pezza did not have standing, concluding that Pezza did indeed have standing because he had been subjected to a discriminatory policy of being labeled on the basis of creed. The Commissioner also concluded that the club was a place of public accommodation as defined by the Human Rights Law, and was not a "distinctly private" organization (Executive Law § 292[9]) exempt from the anti-discrimination provisions of that statute. The Commissioner further noted that, although the club's goal was to create an environment free from religious prejudice, its balanced membership policy violated the Human Rights Law since it excluded some potential members, favored other members, and offered discounted fees based solely upon an applicant's creed. The Commissioner ordered the club to evaluate applicants for membership without discrimination on the basis of creed, and to grant membership to all persons without regard to creed. The club subsequently commenced this proceeding, seeking to review the Commissioner's determination, and the matter was transferred to this Court pursuant to CPLR 7804(g).

Judicial review of an administrative determination made after a hearing required by law, and at which evidence was taken, is limited to whether the determination is supported by substantial evidence (see 300 Gramatan Ave. Assoc. v State Div. of Human Rights, 45 NY2d 176, 179; Matter of Venditti v New York State Dept. of Envtl. Conservation, 57 AD3d 685; Matter of Genovese Drug Stores, Inc. v Harper, 49 AD3d 735; Matter of Sauer v Donaldson, 49 AD3d 656). "In the final analysis, it is not the function of the reviewing court to weigh the evidence or substitute its own judgment for that of an administrative body to whose expertise a subject matter has been entrusted, but rather to determine whether there is a reasonable ...

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