Eileen BRANSTEN, Justice of the Supreme Court of the State of New York, Phyllis Orlikoff Flug, Justice of the Supreme Court of the State of New York, Martin J. Schulman, Justice of the Supreme Court of the State of New York, F. Dana Winslow, Justice of the Supreme Court of the State of New York, Betty Owen Stinson, Justice of the Supreme Court of the State of New York, Michael J. Brennan, Justice of the Supreme Court of the State of New York, Arthur M. Schack, Justice of the Supreme Court of the State of New York, Barry Salman, Justice of the Supreme Court of the State of New York, John Barone, Justice of the Supreme Court of the State of New York, Arthur G. Pitts, Justice of the Supreme Court of the State of New York, Thomas D. Raffaele, Justice of the Supreme Court of the State of New York, Paul A. Victor, retired Justice of the Supreme Court of the State of New York, Joseph Giamboi, retired Justice of the Supreme Court of the State of New York, The Association of Justices of the Supreme Court of the State of New York, The Supreme Court Justices Association of the City of New York, Inc. and John and Mary Does 1-2000, current and retired Judges and Justices of the Unified Court System of the State of New York, Plaintiffs,
The STATE of New York, Defendant.
[969 N.Y.S.2d 404] Stroock Stroock & Lavan LLP by Joseph L. Forstadt, New York, for Plaintiff.
Eric T. Schneiderman, Attorney General of the State of New York, Andrew Meier and Garrett Coyle, New York, for Defendant.
CAROL R. EDMEAD, J.
This declaratory judgment action brought by the Association of the Justices of the Supreme Court of the State of New York and current and retired members of the New York State Judiciary, challenges the constitutionality of the decision by the State of New York (" defendant" ) to reduce the State's contribution to the Justices' health insurance benefits.
Defendant now moves to dismiss the plaintiffs' Complaint on the ground that the Complaint fails to state a cause of action
(CPLR 3211[a] ), or in the alternative, that its defense is founded upon documentary evidence (CPLR 3211[a] ).
In early of 2010, the Court of Appeals issued a decision in Matter of Maron v. Silver, 14 N.Y.3d 230, 899 N.Y.S.2d 97, 925 N.E.2d 899 , which addressed the issue of whether the Legislature's failure to make upward adjustments to the Justices' and Judges' compensation for more than 10 years violated the New York State Constitution's Compensation Clause (Article VI, Section 25) (the " Compensation Clause" ) and Separation of Powers Doctrine.  After discussion of the goals of each, the Court of Appeals held that the Legislature's failure to consider judicial compensation on the merits violated the Separation of Powers Doctrine, and urged the Legislature to take " appropriate and expeditious" action to adjust the Judiciary's compensation.
Consequently, in 2010, the Legislature enacted the Act of Dec. 10, 2010, ch. 56 (the " Salary Commission Law" ), which created the Commission of Judicial Compensation (" Commission" ) to examine, every four years, the " adequacy of pay levels and non-salary benefits" of Justices and Judges. In the summer of 2011, the Commission held several meetings and a public hearing, and issued a Final Report on August 29, 2011 recommending judicial [969 N.Y.S.2d 405] pay increases in three phases: (1) an increase to $160,000 on April 1, 2012, (2) an increase to $167,000 on April 1, 2013, and an increase to $174,000 on April 1, 2014. 
During the pendency of the Commission's study, and in an effort to address the budget crisis facing the State of New York, the Legislature negotiated agreements with certain public-sector unions impacting the State's employees' salaries and benefits. It was posited that instead of laying off thousands of State employees, in June 2011, the Legislature agreed to, inter alia, a reduction
in the percentage of the State's contribution toward employees' health insurance premiums.
And, instead of negotiating with thousands of unrepresented employees, in August 2011, the Legislature amended Civil Service Law § 167.8 (" Section 167.8" ) to allow the president of the Civil Service Department (with the approval of the State Budget Director) to extend the terms of the union agreement to unrepresented State employees and retirees.
On September 27, 2011, the Civil Service Department proposed to implement changes for those excluded from collective bargaining within the meaning of the Taylor Law, Civil Service Law Article 14 ( i.e., the plaintiffs).
On September 30, 2011, plaintiffs, for the first time, were notified, of the reduction in the State's contribution to their health insurance premiums, which would require them to pay more per year for their health insurance premiums. The State's contribution rate change took effect on October 1, 2011, resulting in a 6% increase in plaintiffs' contribution to the cost of their health insurance (such as co-payments, deductibles, and prescription drug costs). The premium contribution rate for retired Justices increased by 2%, and the rate for those Justices retiring on or after January 1, 2012 increased by 6% percent.
Since the Commission's recommendations were not modified or abrogated by the Legislature or Governor, the first of the three-phrase judicial pay raise increases went into effect on April 1, 2012.
On or about December 26, 2012, plaintiffs commenced this proceeding to enjoin defendant from imposing the higher premium contribution rates, co-payments, and deductibles for health insurance. Plaintiffs assert that since " compensation" includes health benefits, the value of their compensation has been diminished by defendant's actions, in violation of the
Compensation Clause, which guarantees that plaintiffs' compensation shall not be diminished during their term in office.
[969 N.Y.S.2d 406] In moving to dismiss the Complaint, defendant sets forth the following arguments: (1) according to federal Compensation Clause jurisprudence, which New York Court's follow, the Compensation Clause permits broadly applicable laws that indirectly reduce the take home pay of Judges in a non-discriminatory manner that does not single out Judges; Section 167.8 is akin to the " Medicare tax" upon federal employees which the Supreme Court held was permissible under the federal Compensation Clause in United States v. Hatter, 532 U.S. 557, 121 S.Ct. 1782, 149 L.Ed.2d 820 ; (2) the Commission considered " non-salary" benefits such as health insurance in its study, and the Judicial salary increase which occurred six months after the change in contributions cured any violation of the Compensation Clause; (3) the express language of the Compensation Clause renders it inapplicable to the retired Justices and Judges; and (4) the John and Mary Doe plaintiffs should be dismissed from this proceeding, as there is no procedure that allows the use of " John Doe" for plaintiffs who are unknown, except in a class action suit, which has not been sought herein.
Defendant contends that the adoption of plaintiffs' theory would lead to absurd, unworkable results if applied to other forms of benefits, such as reimbursement for travel expenses and other fringe benefits, and would prevent the defendant from, for example, switching health insurance plans that increased premiums costs, but lowered co-payments. Plaintiffs' theory also ignores the long history of reductions in the State's contribution rate toward health insurance costs. Further, the duly amended Section § 167.8 enjoys a strong presumption of constitutionality, and plaintiffs cannot establish its unconstitutionality " beyond a reasonable doubt."
In opposition, plaintiffs argue that courts have held that health benefits comprise part of judicial compensation. When defendant reduced its contribution to plaintiffs' health care insurance, it directly increased the cost of plaintiffs' health insurance, and such legislative action has been held by courts in
other jurisdictions as a direct reduction in judicial compensation. Further, while case law holds that the Compensation Clause does not prevent lawmakers from enacting generally applicable, non-discriminatory taxes on judges' compensation, such case law is distinguishable as Section 167.8 was imposed by the State as an employer (as opposed to the State as a sovereign), and Section 167.8 does not affect all residents of New York State or all State employees equally.
Further, defendant's reduction is discriminatory and singles out judges. The increased contributions are not borne by all New York State residents, but imposed upon solely New York State employees and retired employees. Nor does Section 167.8 affect all employees of the State of New York. Indeed, plaintiffs did not receive the same benefits that represented State employees received. Thus, Section 167.8 is akin to the " Social Security tax" imposed upon federal judges, previously held to be unconstitutional by the United States Supreme Court in Hatter, quoted above. ...