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Okslen Acupuncture, P.C. v. Lawsky

Supreme Court, Kings County

November 12, 2013

Okslen Acupuncture, P.C., Petitioner,
v.
Benjamin Lawsky, SUPERINTENDENT AND DEPARTMENT OF FINANCIAL SERVICES OF THE STATE OF NEW YORK, Respondents.

Petitioner: Law Offices of Gary Tsirelman, P.C.

Respondents: Eric T. Schneiderman

PETER P. SWEENEY, A.J.S.C.

Upon the foregoing papers, respondents' motion for summary judgment is decided as follows:

In this hybrid proceeding, the respondents had previously moved by pre-answer motion to dismiss all causes of action alleged in the petition. By decision and order dated September 21, 2012, the motion was partially granted and all causes of action were dismissed except for the declaratory judgment action in which petitioner seeks a declaration that CPLR 5108(b) [1] is unconstitutional. The Court held that this cause of action, even though alleged in a CPLR Article 78 proceeding, was subject to the rules governing plenary actions and that respondents' motion, to the extent it sought an order dismissing this cause of action, was a motion for summary judgment which was premature as issue had not been joined (CPLR 3212[a]). Although the Court respondents' motion insofar as it sought dismissal of this cause of action was denied, the denial was without prejudice and respondents were granted leave to renew after they interposed an answer. Respondents have since interposed an answer and now they seek renewal of their motion to dismiss the cause of action in which petitioner seeks a declaration that CPLR 5108(b) is unconstitutional. The Court will now address the motion.

Insurance Law 5108(b), in essence, authorizes the Superintendent, after consulting with the Commissioner of Health and the Chairman of the Workers' Compensation Board, to establish schedules of authorized payment for services not covered by the schedules already promulgated by the Workers' Compensation Board. Petitioner contends that Insurance Law 5108(b) must be invalidated as an affront to the separation of powers doctrine. [2] In this regard, petitioner maintains that the statute was an unlawful delegation of legislative power to the Superintendent inasmuch as it gave him unfettered discretion in establishing fee schedules for services not covered by the schedules already promulgated by the Workers' Compensation Board. The Court disagrees.

While "[t]he legislative power of this State shall be vested in the Senate and the Assembly' (N.Y.Const., art. III, § 1) and that Legislature cannot pass on its law-making functions to other bodies (Matter of Mooney v. Cohen, 272 NY 33, 37, 4 N.E.2d 73, 74 [1936]), there is no constitutional prohibition against the delegation of power, with reasonable safeguards and standards, to an agency or commission to administer the law as enacted by the Legislature (Packer Coll. Inst. v. University of State of NY, 298 NY 184, 190, 81 N.E.2d 80, 82 [1948]; Matter of Barone [Waterfront Comm. of NY Harbor ], 18 Misc.2d 1066, 1069, 187 N.Y.S.2d 617, 620 [1959], aff'd., 8 A.D.2d 783, 187 N.Y.S.2d 622 [1959], aff'd., 7 N.Y.2d 913, 197 N.Y.S.2d 479, 165 N.E.2d 427 [1960]). It is now well settled that "[t]he Legislature may constitutionally delegate rule-making authority to an administrative agency... [even] if it furnishes the agency with.. a broad outline within which to act" (Matter of Bates v. Toia, 45 N.Y.2d 460, 464, 410 N.Y.S.2d 265, 382 N.E.2d 1128 [1978]; see, Matter of Levine v. Whalen, 39 N.Y.2d 510, 515—516, 384 N.Y.S.2d 721, 349 N.E.2d 820 [1976]).

The outline within which the Secretary must act in connection with his discretionary authority under to implement and interpret the provisions of the Insurance Law, including Insurance Law 5108(b), is set forth in Insurance Law § 301, which, in relevant part, provides: "[t]he superintendent shall have the power to prescribe and from time to time withdraw or amend, in writing, regulations, not inconsistent with the provisions of this chapter.... " (Insurance Law § 301 [3] [ emphasis added ]). In Medical Society of State v. Serio, 100 N.Y.2d 854, 800 N.E.2d 728, 768 N.Y.S.2d 423 [2003], the Court of Appeals addressed whether Insurance Law § 301 violated the separation of powers doctrine and held the "broad grant of regulatory power" the statute bestowed upon the Superintendent did "not cede to the executive branch fundamental legislative or policymaking authority, which remains at all times with the Legislature." (100 N.Y.2d at 864-865, 800 N.E.2d at 728, 768 N.Y.S.2d at 429). This holding can only be interpreted to mean that Insurance Law § 301 provides a constitutionally adequate standard to govern the Superintendent's discretionary authority to promulgate regulations implementing and interpreting the Insurance Law, including Insurance Law § 5108(b). Indeed, the holding Medical Society of State is consistent with the modern view that it is no longer "necessary that the Legislature supply administrative officials with rigid formulas in fields where flexibility in the adaptation of the legislative policy to infinitely variable conditions constitutes the very essence of the programs" (Matter of Nicholas v. Kahn, 47 N.Y.2d 24, 31, 416 N.Y.S.2d 565, 389 N.E.2d 1086 [1979]). Accordingly, Insurance Law 5108(b) is not an unconstitutional affront to the separation of powers doctrine.

For all of the above reasons, it is hereby

ORDERED AND ADJUDGED that Insurance Law § 5108(b) is not unconstitutional; and it is further

ORDERED AND ADJUDGED that respondents' motion for summary judgment dismissing the cause of action in which petitioner seeks a declaration that Insurance Law § 5108(b) is unconstitutional is GRANTED.

This constitutes the decision, order and judgment of the Court.


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