United States District Court, N.D. New York
The NEW YORK STATE CORRECTIONAL OFFICERS & POLICE BENEVOLENT ASSOCIATION, INC., Donn Rowe, individually, and as President of the New York State Correctional Officers & Police Benevolent Association, Inc., on Behalf of Themselves and All Others Similarly Situated, Plaintiffs,
The State of NEW YORK, Andrew M. Cuomo, individually, and in his official capacity as Governor of the State of New York, New York State Civil Service Department, Patricia A. Hite, individually, and in her official capacity as Acting Commissioner, New York State Civil Service Department, New York State Civil Service Commission, Caroline W. Ahl and J. Dennis Hanrahan, individually, and in their official capacities as Commissioners of the New York State Civil Service Commission, Robert L. Megna, individually, and in his official capacity as Director of the New York State Division of the Budget, and Thomas P. DiNapoli, individually, and in his official capacity as Comptroller of the State of New York, and New York State and Local Retirement System, Defendants.
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
Sheehan Greene Goldman & Jacques LLP, Jeffrey P. Mans, Esq., of Counsel, Albany, NY, for Plaintiffs.
Eric T. Schneiderman, Attorney General of the State of New York, Charles J. Quackenbush, Esq., Asst. Attorney General, of Counsel, Albany, NY, for Defendants.
MEMORANDUM-DECISION AND ORDER
MAE A. D'AGOSTINO, District Judge:
Plaintiffs commenced the within action alleging that defendants unilaterally increased the percentage of contributions that plaintiffs, active and retired employees, are required to pay for health insurance benefits in retirement and, thereby, violated the Contracts Clause and Due Process Clause of the United States Constitution, impaired plaintiffs' contractual rights under the terms of their Collective Bargaining Agreement, and violated state law. Plaintiffs seek injunctive relief, declaratory judgments and monetary damages. Presently before the Court is defendants' motion to dismiss plaintiffs' complaint pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6). See Dkt. No. 13. Plaintiffs have opposed the motion. Dkt. No. 17.
Plaintiff, New York State Correctional Officers & Police Benevolent Association, Inc. (" NYSCOPBA" or " the Union" ) is the collective bargaining representative for members of the Security Services Unit of State Employees including, inter alia, Correctional Officers, Correctional Sergeants, Institution Safety Officers and Community Correctional Center Assistants employed by the State of New York and the New York State Department of Corrections and Community Supervision (" DOCCS" ).
Plaintiff Donn Rowe (" Rowe" ) is the President and member of NYSCOPBA and an active employee of the State of New York and a vested member in the New York State Employees Retirement System (" NYS ERS" ). Plaintiff Al Mothershed is an active employee of the State of New York and a member of NYSCOPBA enrolled and receiving health benefits through the New York State Health Insurance Program and a vested member in the NYS ERS. Plaintiffs Art W. Jolley, Louis Giampaglia, David Faile, William West and Diane Davis are former State employees and former members of NYSCOPBA now retired and receiving health benefits through NYSHIP. During the relevant time, defendant Patricia Hite (" Hite" ) was Acting Commissioner of the Civil Service Department and Acting President of the Civil Service Commission. Defendants Caroline W. Ahl (" Ahl" ) and J. Dennis Hanrahan (" Hanrahan" ) were members of the Civil Service Commission. Defendant Robert Megna (" Megna" ) was the Director of the New York State Division of the Budget. Defendant Thomas P. DiNapoli (" DiNapoli" ) was the Comptroller of the State of New York responsible for the administration of the New York State and Local Retirement System. The New York State and Local Retirement System is responsible for making monthly pension payments to eligible retired State employees
less any deductions for the payment of retiree health insurance.
Article XI of the New York State Civil Service Law (" CSL" ) provides for a statewide health insurance plan for eligible State employees and retired State employees known as the New York State Health Insurance Plan (" NYSHIP" or " Empire Plan" ). New York Civil Service Law § 167(1) assigns the State contribution rate towards the cost of health insurance premium or subscription charges for the coverage of State employees and retired State employees enrolled in NYSHIP. Prior to 1983, the State was required to pay the full cost of premium or subscription charges for the coverage of State employees and retired State employees enrolled in NYSHIP. Chapter 14 of the Laws of 1983 amended Civil Service Law § 167(1)(a) to limit the amount that the State was required to pay towards the cost of premium or subscription charges for the coverage of State employees and retired State employees enrolled in NYSHIP, by providing that the State was required to contribute only ninety percent (90 %) of the cost of such premium or subscription charges for the coverage of State employees and retired State employees retiring on or after January 1, 1983. The State would continue to contribute seventy-five percent (75 %) for dependent coverage for State employees and retired State employees.
The Governor's Program Bill Memorandum regarding the 1983 amendment provided that " [t]he State and the employee organizations representing State workers have agreed to a reduction of the State's contribution for the premium or subscription charges for employees enrolled in the statewide health insurance plan."
The Division of the Budget's Report on Bills also acknowledged that the rates were the product of an agreement:
1. Subject and Purpose: This bill would implement certain unenacted portions of collectively negotiated health insurance benefit and cost agreements between the State and the employee organizations representing certain State employees.
* * * * * *
4. Arguments in Support: This measure provides the necessary authorization to implement negotiated agreements between the State and the employee organizations representing State employees. This action is appropriate in view of the " good faith" efforts of the State and the employee organizations to reach agreement on this critical issue.
* * * * * *
9. Recommendation: Because this measure would implement certain unenacted portions of collectively negotiated health benefit and cost agreements between the State and employee organizations representing certain State employees and result in significant direct cost savings to the State, we recommend its approval.
Between 1983 and 2011, Civil Service Law § 167(8) provided, inter alia,
[n]otwithstanding any inconsistent provision of law, where and to the extent that an agreement between the state and an employee organization entered into pursuant to article fourteen of this chapter so provides, the state cost of premium or subscription charges for eligible employees covered by such agreement may be increased pursuant to the terms of such agreement.
NYSCOPBA and the State of New York entered into a Collective Bargaining Agreement (" CBA" ) and Interest Arbitration
Award effective April 1, 2007 through March 31, 2009. Article 12 of the CBA governs the coverage of Health, Dental and Prescription Drug Insurance. Section 12.1 of the CBA provides as follows: 
The State shall continue to provide all the forms and extent of coverage as defined by the contracts and Interest Arbitration Awards in force on March 31, 2007 with the State health and dental insurance carriers unless specifically modified or replaced pursuant to this agreement.
Section 12.8 of the 2007-2009 NYSCOPBA CBA is entitled Premium Contribution and provides:
(a) The State agrees to pay 90 percent of the cost of individual coverage and 75 percent of dependent coverage, provided under the Empire Plan. The State shall pay 90 percent for individual prescription drug coverage and 75 percent for dependent prescription drug coverage under the Empire Plan.
(b) The State agrees to pay 90 percent of the cost of individual coverage and 75 percent of dependent coverage, toward the hospital/medical/mental health and substance abuse components of each HMO, not to exceed, 100 percent of its dollar contribution for those components under the Empire Plan. The State will pay 90 percent of the cost of individual prescription drug coverage and 75 percent of the cost of dependent prescription drug coverage under the Health Maintenance Organizations.
(c) The unremarried spouse of an employee, who retires after April 1, 1979, with ten or more years of active State service and subsequently dies, shall be permitted to continue coverage in the health insurance program with payment at the same contribution rates as required of active employees.
(d) The unremarried spouse of an active employee, who dies after April 1, 979 and who, at the date of death was vested in the Employee's Retirement system and within ten years of his/her first date of eligibility for retirement shall be permitted to continue coverage in the health insurance program with payment at the same contribution rates as required of active employees.
On August 17, 2011, the legislature passed Chapter 491 of the Laws of 2011 (" Chapter 491" ). Chapter 491 amended § 167(8) and replaced the word " increased" with the word " modified." The amendment further provided that
[t]he president [of the Civil Service Commission], with the approval of the director of the budget, may extend the modified state cost of premium or subscription charges for employees or retirees not subject to an agreement referenced above and shall promulgate the necessary rules or regulations to implement this provision.
In August 2011, the New York State Civil Service Department issued an Empire Plan Special Report announcing the implementation of new reduced State contribution rates in NYSHIP for New York State Retirees, Vestees and Dependent Survivors and Employees of the State of New York designated as Management/Confidential (M/C) and Legislature employees.
On September 21, 2011, defendant Hite requested defendant Megna's approval to extend the modified contribution rates. On September 22, 2011, defendant Megna approved the extension of modified contribution rates.
On October 1, 2011, defendants implemented new reduced State contribution rates, which resulted in a two percent (2 %) reduction in the State contribution rates for Individual coverage from ninety percent (90 %) to eighty-eight percent (88 %), and Dependent Coverage, from seventy-five percent (75 %) to seventy-three percent (73 %), for enrolled State retirees, including NYSCOPBA retirees, who retired on or after January 1, 1983.
Defendants approved and filed emergency regulations to implement the reduction in State contribution rates effective October 1, 2011, and a further reduction in State contribution rates for employees retiring from State service on or after January 1, 2012, including NYSCOPBA employees. These reductions will result in a six percent (6 %) reduction in the State contribution rates for individual coverage from ninety percent (90 %) to eighty-four percent (84 %) and dependent coverage from seventy-five percent (75 %) to sixty-nine percent (69 %) for those retirees retiring from a title Salary Grade 10 or above, from a position equated to Salary Grade 10 or above, or for those who retire from a position which is not allocated or equated to a Salary Grade.
On February 14, 2012, plaintiffs filed an amended complaint (Dkt. No. 9) asserting causes of action for impairment of contract, violation of due process, violation of civil rights pursuant to 42 U.S.C. § 1983, and breach of contract. Plaintiffs also claim that Civil Service Law § 167(8) is unconstitutional as applied and assert that defendants Hite and Megna lacked authority under § 167(8) to approve and implement the reduction in State contribution rates. Plaintiffs also seek an order, pursuant to Article 78 of the New York Civil Practice Law and Rules, vacating and annulling defendants' actions in administratively approving, extending and implementing increases in the contribution rates that retired State employees are required to pay for health insurance benefits in retirement. Plaintiffs commenced this action against the individual defendants in both their individual and official capacities.
Standard on a Motion to Dismiss under 12(b)(1)
In contemplating a motion to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1), the Court must " accept as true all material factual allegations in the complaint[.]" Atl. Mut. Ins. Co. v. Balfour Maclaine Int'l Ltd., 968 F.2d 196, 198 (2d Cir.1992). The court may consider evidence outside the pleadings, e.g., affidavit(s), documents or otherwise competent evidence. See Kamen v. Am. Tel. & Tel. Co., 791 F.2d 1006, 1011 (2d Cir.1986); Antares Aircraft v. Fed. Rep. of Nigeria, 948 F.2d 90, 96 (2d Cir.1991). " The standards for considering a motion to dismiss under Rules 12(b)(1) and 12(b)(6) are substantively identical." Lerner v. Fleet Bank, N.A., 318 F.3d 113, 128 (2d Cir.2003).
Defendants move for dismissal pursuant to Fed.R.Civ.P. 12(b)(1) arguing that the Eleventh Amendment precludes the Court from obtaining subject matter jurisdiction over the following claims: (1) all of plaintiffs' claims against the State of New York and its agencies; (2) plaintiffs' claims against defendants in their official capacities; and (3) plaintiffs' Article 78 cause of action. Defendants also allege that the principals of the Younger doctrine require abstention in this matter.
I. Eleventh Amendment
The Eleventh Amendment provides that " [t]he Judicial power of the United States shall not be construed to
extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State." State Emp. Bargaining Agent Coalition v. Rowland, 494 F.3d 71, 95 (2d Cir.2007) (citing U.S. Const. amend. XI). The Eleventh Amendment bars federal courts from exercising subject matter jurisdiction over claims against states absent their consent to such a suit or an express statutory waiver of immunity. See Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 90-100, 104 S.Ct. 900, 79 L.Ed.2d 67 (1984); see also Huminski v. Corsones, 386 F.3d 116, 133 (2d Cir.2004) (citation omitted). Although the plaintiff generally bears the burden of proving subject matter jurisdiction, the entity claiming Eleventh Amendment immunity bears the burden to prove such. See Woods v. Rondout Valley Cent. Sch. Dist. Bd. of Educ., 466 F.3d 232, 237 (2d Cir.2006).
Section 1983 imposes liability for " conduct which ‘ subjects, or causes to be subjected’ the complainant to a deprivation of a right secured by the Constitution and laws." Rizzo v. Goode, 423 U.S. 362, 370-71, 96 S.Ct. 598, 46 L.Ed.2d 561 (1976) (quoting 42 U.S.C. § 1983). It is well-settled that states are not " persons" under section 1983 and, therefore, Eleventh Amendment immunity is not abrogated by that statute. See Will v. Mich. Dep't of State Police, 491 U.S. 58, 71, 109 S.Ct. 2304, 105 L.Ed.2d 45 (1989).
A. Federal Claims against State of New York, New York State Civil Service Department, New York State Civil Service Commission and New York State and Local Retirement System
Regardless of the type of relief sought, the Eleventh Amendment bars this Court from assuming jurisdiction over plaintiffs' claims asserted against the State of New York and its agencies. When the state or one of its " arms" is the defendant, sovereign immunity bars federal courts from entertaining lawsuits against them " regardless of the nature of the relief sought." Pennhurst, 465 U.S. at 100, 104 S.Ct. 900. In this case, the State has neither waived its immunity, nor has Congress exercised its power to override Eleventh Amendment immunity. Accordingly, plaintiffs' claims against the State of New York, New York State Civil Service Department, New York State Civil Service Commission and New York State and Local Retirement System are dismissed. See McGinty v. New York, 251 F.3d 84, 100 (2d Cir.2001) (dismissing the claims against the Retirement System for lack of subject matter jurisdiction based upon the Eleventh Amendment).
B. Federal Claims Against State Officials in their Official Capacity
Plaintiffs also assert claims against defendants Cuomo, Hite, Ahl, Hanrahan, Megna and DiNapoli in their official capacities. Eleventh Amendment immunity extends to state officials sued in their official capacities for retrospective relief. See Kentucky v. Graham, 473 U.S. 159, 166, 105 S.Ct. 3099, 87 L.Ed.2d 114 (1985). Actions for damages against a state official in his or her official capacity are essentially actions against the state, and will be barred by the Eleventh Amendment unless: (1) Congress has abrogated immunity, (2) the state has consented to suit, or (3) the Ex parte Young doctrine applies. See Will, 491 U.S. at 71, 109 S.Ct. 2304. In this matter, the issues presented before this Court involve the third exception.
In Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908), the Supreme Court established an exception to state sovereign immunity in federal actions
where an individual brings an action seeking injunctive relief against a state official for an ongoing violation of law or the Constitution. This doctrine provides " a limited exception to the general principle of sovereign immunity [that] allows a suit for injunctive relief challenging the constitutionality of a state official's actions in enforcing state law under the theory that such a suit is not one against the State, and therefore not barred by the Eleventh Amendment." Ford v. Reynolds, 316 F.3d 351, 354-55 (2d Cir.2003). Under the doctrine, a suit may proceed against a state official in his or her official capacity, notwithstanding the Eleventh Amendment, when a plaintiff, " (a) alleges an ongoing violation of federal law and (b) seeks relief properly characterized as prospective." See In re Deposit Ins. Agency, 482 F.3d 612, 618 (2d Cir.2007) (quotations and citations omitted); see also Santiago v. New York State Dep't of Corr. Serv., 945 F.2d 25, 32 (2d Cir.1991) (holding that such claims, however, cannot be brought directly against the state, or a state agency, but only against state officials in their official capacities).
In Edelman v. Jordan, 415 U.S. 651, 653, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974), the Supreme Court expanded upon Ex parte Young and held that even when a plaintiff's requested relief is styled as an injunction against a state official, if " the action is in essence one for recovery of money from the state, the state is the real, substantial party in interest and is entitled to invoke its sovereign immunity from suit even though individual officials are nominal defendants." Retroactive relief is " measured in terms of a monetary loss resulting from a past breach of a legal duty on the part of the defendant state officials" regardless of how the relief is fashioned. Id. at 668, 94 S.Ct. 1347. Prospective relief includes injunctive relief that bars a state actor from engaging in certain unconstitutional acts or abates ongoing constitutional violations as well as the " payment of state funds as a necessary consequence of compliance in the future with a substantive federal question determination." Id. The " general criterion for determining when a suit is in fact against the sovereign is the effect of the relief sought, namely, would the relief abate an ongoing violation or prevent a threatened future violation of federal law?" Id. In Edelman, the majority concluded:
It is one thing to tell [a state official] that he must comply with the federal standards for the future if the state is to have the benefit of federal funds in the program he administers. It is quite another thing to order the [state official] to use state funds to make reparation for the past. The latter would appear to us to fall afoul of the Eleventh Amendment if that basic constitutional provision is to be conceived of as having any force.
Id. at 695, 94 S.Ct. 1347 (quoting Rothstein v. Wyman, 467 F.2d 226, 236-237 (2d Cir.1972)).
In order to determine whether the Ex parte Young exception allows plaintiffs' suit against the officials, this Court must first determine whether the complaint alleges an ongoing violation of federal law and second, whether plaintiffs seek relief properly characterized as prospective. See Verizon Md., Inc. v. Pub. Serv. Comm'n of Md., 535 U.S. 635, 645, 122 S.Ct. 1753, 152 L.Ed.2d 871 (2002). " [T]o successfully avoid the Eleventh Amendment bar, a plaintiff must prove that a defendant's violation of federal law is of an ongoing nature as opposed to a case ‘ in which federal law has been violated at one time or ...