Pan American World Airways, Inc. v. New York State Human Rights Appeal Board

OPINION OF THE COURT

Section 297 (subd 3, par c) of the Executive Law, provides that the State Division of Human Rights (Division) may dismiss a complaint for administrative convenience in its “unreviewable discretion.” This statute, however, does not serve to entirely divest respondent State Human Rights Appeal Board (Appeal Board) of jurisdiction to review such a decision. Rather, the Appeal Board is empowered to review the dismissal to determine whether it contravenes any statute, constitutional right or the Division’s own regulations and is, therefore “purely arbitrary.” In the instant matter, the Division’s decision was not purely arbitrary and thus, respondent exceeded its powers by reinstating the complaints.

Six of petitioner’s employees were discharged in March 1974. Five months later, they filed complaints with the Division, alleging that they were discharged because of their age, in violation of section 296 of the Executive Law. On May 30, 1975, the United States Secretary of Labor

Petitioner moved to dismiss the State complaints on the ground that the State proceedings before the Division were “superseded” by the Federal action (US Code, tit 29, § 633, subd [a]). On August 25, 1975, the Division granted the motion to the extent of staying its own proceedings during the pendency of the Federal action. In August 1978, the Federal action was dismissed pursuant to a stipulation which provided that petitioner would pay the Secretary $900,000 to be distributed among the affected employees. The settlement, however, expressly provided that petitioner was not admitting any liability. The Secretary made an administrative determination, which the State complainants had no opportunity to contest, that only those workers born prior to 1914 were discriminated against on the basis of age. Accordingly, only one of the six State complainants received any proceeds from the $900,000 settlement.

In February 1979, the Division vacated its stay. However, in May 1980, on petitioner’s motion for reconsideration of said vacatur and for dismissal of the agency proceedings, the Division dismissed the complaints on the ground of administrative convenience (see Executive Law, § 297, subd 3, par c; 9 NYCRR 465.5 [d]). In taking this action, the Division noted the onerous burden on each side of resuming a prolonged hearing with voluminous records, after witnesses had dispersed and memories had likely faded. The Division credited the administrative determination by the Secretary and determined that the substantial interests of the complainants and New York State had been adequately served by the disposition of the Federal action.

An administrative appeal was taken. Respondent Appeal Board reversed the Division’s order and remanded the proceeding for a public hearing on the ground that the

On this appeal, petitioner contends that respondent was without jurisdiction to review an order of the Division which dismissed a complaint for administrative convenience because, under the Human Rights Law and the Division’s rules, a dismissal on this ground is an act of “unreviewable discretion” (see Executive Law, § 297, subd 3, par c; 9 NYCRR 465.5 [d] [1]). Respondent maintains that the statute authorizing the Division to make nonreviewable determinations does not deprive the Appeal Board of jurisdiction to determine whether the Division’s decision violated a party’s constitutional rights, was in excess of statutory authority, or was based upon an erroneous view of applicable law. This court now reverses.

Although, on its face, section 297 (subd 3, par c) of the Executive Law divests respondent of jurisdiction to review a dismissal for administrative convenience, analysis of the over-all statutory scheme indicates that a limited power of review is available. Under the Human Rights Law, respondent is authorized to hear appeals by any party “from all orders of the [Division]” (Executive Law, § 297-a, subd 6, par c), and to reverse, remand or affirm “any order” of the Division, within the confines of the limited scope of its review powers (see Executive Law, § 297-a, subd 7, pars a-e). However, respondent’s rules exclude from its review of all “orders of the commissioner”, those orders for dismissal on the ground of administrative convenience (see 9 NYCRR 550.3 [i]).

Despite this disavowal in its rules, respondent has the limited power to review such a dismissal to determine if it is purely arbitrary (cf. Matter of Baer v Nyquist, 34 NY2d 291 , 298). A dismissal is purely arbitrary if it contravenes statutes, constitutional provisions, or countenances their contravention (id.; see Johnson v Robison, 415 US 361 , 366-374), or violates the agency’s own regulations (see

In this case, the propriety of the Division’s decision under its regulations or any statute has not been challenged. Moreover, complainants’ rights to due process were not violated by the Division’s dismissal of their claims prior to a full evidentiary hearing on the merits. The Human Rights Law provision that bases employer liability upon a finding of discrimination creates a constitutionally protected property interest (see Logan v Zimmerman Brush Co., 455 US 422 , 428-433). Consequently, a claim under this statute may not be finally dismissed consistent with due process unless an opportunity is granted for a hearing appropriate to the nature of the case (id., at p 437).

Here, the Division’s dismissal for administrative convenience did not finally deprive complainants of their interests under the Human Rights Law. Generally, the remedies of administrative review through the Human Rights Division or judicial review are mutually exclusive (see Executive Law, § 297, subd 9; see, also, Emil v Dewey, 49 NY2d 968 , 969). An exception is provided when a complaint is dismissed for administrative convenience: a suit may be brought as if a complaint had never been filed (Executive Law, § 297, subd 9; see Low v Gibbs & Hill, 92 AD2d 467 , 468). Thus, complainants here could maintain