United States District Court, N.D. New York
Lillian ROBERTS as Executive Director of District Council 37, AFSCME, AFL-CIO, District Council 37, AFSCME, AFL-CIO, Dennis Ifill, as President of the Rent Regulation Services Unit Employees, Local 1359, District Council 37, AFSCME, AFL-CIO, the Rent Regulation Services Unit Employees, Local 1359, Clifford Koppelman, as President of the Court, County and Department of Probation Employees Unit, Local 1070, the Court, County, and Department of Probation Employees Unit, Local 1070 and Mildred Brown, Shanomae Wiltshire, Norma Galloway, Charmaine Hardaway, Maurice Bouyea, Steven Schwartz, on behalf of themselves and all others similarly situated, Plaintiffs,
The State of NEW YORK, Andrew M. Cuomo, as Governor of the State of New York, New York State Civil Service Department, Patricia A. Hite, as Acting Commissioner, New York State Civil Service Department, New York State Civil Service Commission, Caroline W. Ahl and J. Dennis Hanrahan, as Commissioners of the New York State Civil Service Commission, Robert L. Megna, as Director of the New York State Division of the Budget, and Thomas P. Dinapoli, as Comptroller of the State of New York, and New York State and Local Retirement System, Defendants.
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District Council 37, Erica C. Gray-Nelson, Esq., of Counsel, New York, 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, retired employees, are required to pay for health insurance benefits in retirement and 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). (Dkt. No. 10). Plaintiffs have opposed the motion. (Dkt. No. 14).
Council 37, American Federation of State, County and Municipal Employees (" AFSCME" ), AFL-CIO (" council" ) is the collective bargaining representative for employees of the State of New York in the Rent Regulation Services Unit (" RRSU" ) and members of the Court, County and Department of Probation Employees Unit (" Court Unit" ). Council 37 is a combination of 55 local unions. Plaintiff Lillian Roberts is the Executive Director and Chief Executive Officer of Council 37. Plaintiff Dennis Ifill is the President of Local 1359, an active employee of the State of New York and a member of RRSU. Local 1359 represents 302 members employed with the New York State Division of Housing and Community Renewal who receive benefits through the New York State Health Insurance Program (" NYSHIP" ). Plaintiff Ifill receives dependent health coverage benefits through NYSHIP and is a vested member of the New York State Employees' Retirement System. Plaintiff Clifford Koppelman is the President of Local 1070, the Court Unit, which represents members of the New York State Unified Court System.
Plaintiffs Mildred Brown, Shanomae Wiltshire, Norma Galloway, Charmaine Hardaway and Maurice Bouyea are former State employees covered by the RRSU collective bargaining unit who retired and receive coverage through NYSHIP. Plaintiff Steven Schwartz was a State employee covered by the Court Unit who retired and receives coverage 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 NYSHIP or (maybe) " 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. Chapter 14 was introduced to implement contract provisions negotiated through collective bargaining between the State and various public employee unions regarding health insurance benefits and costs, including an agreed upon reduction of the State's contribution rate for the premium or subscription charges for employees enrolled in NYSHIP, while continuing the State's full contribution for retired State employees who retired before January 1, 1983. The purpose of Chapter 14 of the Laws of 1983 was " to effectuate provisions of various memoranda of understanding executed pursuant to the collectively-negotiated agreements between the State and the employee organizations ... dealing with health insurance."
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.
From 1984 to 2011, there have been eight consecutive Collective Bargaining Agreements (" CBAs" ) between the State and Council 37. Since 1984, Article 9 of each CBA between the RRSU and the State has contained the following language: 
§ 9.1 Continuation
The State shall continue to provide all the forms and extent of coverage as defined by the contracts in force on April 1, 2007 with the State's health insurance carriers unless specifically modified or replaced pursuant to this agreement.
§ 9.2(1) Eligibility
Effective January 1, 1992, an employee who is eligible to continue health insurance coverage upon retirement and who is entitled to sick leave credit to be used to defray any employee contribution toward the cost of the premium, may elect an alternative method of applying the basic monthly value of the sick leave credit. Employees selecting the basic sick leave credit may elect to apply up to 100 percent of the calculated basic monthly value of the credit toward defraying the required contribution to the monthly premium during their own lifetime.
§ 9.4 Empire Plan Premium
The State agrees to pay 90 percent of the cost of individual coverage and 75 percent of the cost of dependent coverage toward hospital/medical/mental health and substance abuse/prescription drug components provided under the Empire Plan.
Article 8.1 of the Court Units Agreement provides as follows: 
The State shall continue to provide health and prescription drug benefits administered by the Department of Civil Service. Employees enrolled in such plans shall receive health and prescription drug benefits to the same extent, at the same contribution level and in the same form and with the same co-payment structure that applies to the majority of represented Executive Branch employees covered by such plans.
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.
On September 21, 2011, defendant Hite requested defendant Megna's approval to increase the premium contribution rates plaintiffs-retirees pay from ten percent (10%) to twelve percent (12%) for individual coverage and from twenty-five percent (25%) to twenty-seven percent (27%) for dependent coverage. On September 22, 2011, Megna approved the extension of modified contribution rates. Defendants approved and filed emergency regulations to implement the aforesaid reduction in State contribution rates effective October 1, 2011.
On January 10, 2012, plaintiffs filed a complaint (Dkt. No. 1) and asserted 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 seek judgment pursuant to Article 78 of the New York Civil Practice Laws and Rules.
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. Plaintiffs' complaint does not indicate whether they are seeking relief against the individual defendants in their individual capacities, official capacities, or both. Plaintiffs' opposition to the motion does not clarify this issue. For the purposes of this motion, the Court will assume that plaintiffs intended to assert causes of action against defendants in both their official and individual capacities.
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 not 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 (quotation omitted).
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 another over a period of time in the past.’ " Papasan v. Allain, 478 U.S. 265, 277-78, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986). The inquiry for determining whether an " ongoing violation" exists is, " does the enforcement of the law amount to a continuous violation of plaintiffs constitutional rights or a single act that continues to have negative consequences for plaintiffs." New Jersey Educ. Ass'n v. New Jersey, No. 11-5024, 2012 WL 715284, at *4 (D.N.J. Mar. 5, 2012).
Defendants argue that Eleventh Amendment immunity extends to state officials but fail to address the Ex parte Young exception. Here, plaintiffs argue that a " straightforward inquiry" reveals that plaintiffs have alleged a violation of federal law. Plaintiffs allege that defendant officials are engaged in enforcing Chapter 491 of the Laws of 2011, a law that is contrary to federal law because it impairs their rights under Article I, Section 10 of the U.S. Constitution. Plaintiffs also allege that officials are implementing a state statute that violates federal due process. An allegation that state officials are enforcing a law in contravention of controlling federal law is sufficient to allege an ongoing violation of federal law for the purposes of Ex parte Young. See Chester Bross Const. Co. v. Schneider, 886 F.Supp.2d 896, 904-05 (C.D.Ill.2012) (citing Verizon Md., Inc., 535 U.S. at 645, 122 S.Ct. 1753). Thus, plaintiffs have satisfied the first prong of Ex parte Young.
With respect to nature of the relief sought, plaintiffs' " WHEREFORE" clause contains the following requests:
(a) Declaring that State defendants' actions increasing contribution rates paid by plaintiffs and the class they represent, are unconstitutional in violation of the Contract Clause of Article I, § 10 of the United States Constitution, and permanently enjoining State defendants from implementing same;
(b) Declaring that State defendants' actions increasing contribution rates
paid by plaintiffs and the class they represent violate the RRSU and Court Unit contracts with the State;
(c) Declaring that State defendants' actions increasing contribution rates paid by plaintiffs and the class they represent, are unconstitutional in violation of Article I, § 6 of the New York State Constitution, and permanently enjoining State defendants from implementing same; 
(d) Declaring that State defendants' actions increasing contribution rates paid by plaintiffs and the class they represent, are unconstitutional in violation of their Fourteenth Amendment Due Process rights under the United States Constitution, and ...