| Matter of Roemer v Cuomo |
| 2009 NY Slip Op 08120 [67 AD3d 1169] |
| November 12, 2009 |
| Appellate Division, Third Department |
| In the Matter of James W. Roemer Jr., Appellant, v Andrew M.Cuomo, as Attorney General of the State of New York, Respondent. |
—[*1] Andrew M. Cuomo, Attorney General, Albany (Denise A. Hartman of counsel), forrespondent.
McCarthy, J. Appeal from an order of the Supreme Court (Connolly, J.), entered February17, 2009 in Albany County, which denied petitioner's application to quash a subpoena ducestecum issued by respondent.
As part of his investigation into the propriety of state retirement benefits awarded toprofessionals who provided services to school districts and local governments, respondent issuedtwo subpoenas duces tecum to petitioner, an attorney who maintained a private law practicewhile simultaneously providing services to various municipalities until his retirement in 2001.Respondent's focus on petitioner concerns whether petitioner was legitimately classified an"employee" entitling him to receive state retirement benefits based on work performed bypetitioner and other individuals at his law firms. The subpoenas were issued pursuant torespondent's authority under Executive Law § 63 (12) and State Finance Law § 190.Petitioner successfully challenged the initial subpoena, which sought materials relating topetitioner's businesses and finances from January 1, 1971 to the present. By order datedSeptember 12, 2008, Supreme Court found respondent's factual predicate for the first subpoenainsufficient to support the demand for materials for the time period from 1971 to 1984 and thecourt quashed the subpoena. Respondent did not appeal from that order and, therefore, we haveno occasion to [*2]consider it. Respondent subsequently issuedthe second subpoena, more specifically identifying the material sought and limiting the timeperiod for which respondent now seeks documents from January 1, 1984 to the present.Petitioner's challenge to the second subpoena was unsuccessful and this appeal ensued.
It is well settled that an agency's investigative subpoena should not be quashed unless "thefutility of the process to uncover anything legitimate is inevitable or obvious or where theinformation sought is utterly irrelevant to any proper inquiry" (Anheuser-Busch, Inc. vAbrams, 71 NY2d 327, 331-332 [1988] [internal quotation marks and citations omitted]; see Matter of Abbruzzese v New YorkTemporary State Commn. on Lobbying, 43 AD3d 518, 519 [2007]). The subpoenamust, however, be issued pursuant to legitimate authority and seek relevant information, andthere must be some factual basis for the inquisitorial action (see Matter of A'Hearn vCommittee on Unlawful Practice of Law of N.Y. County Lawyers' Assn., 23 NY2d 916, 918[1969], cert denied 395 US 959 [1969]).
Respondent has authority to investigate potential fraud and illegality concerning the receiptof benefits from the public pension system, including efforts to misrepresent an independentcontractor as an employee in order to qualify the individual for benefits (see Matter of Hoganv Cuomo, 67 AD3d 1144 [2009] [decided herewith]). Under the Executive Law, respondenthas broad authority to investigate "repeated fraudulent or illegal acts" and "persistent fraud orillegality in the carrying on, conducting or transaction of business," and to issue subpoenas inconnection with such investigations (Executive Law § 63 [12]; see Matter of Napatco,Inc. v Lefkowitz, 43 NY2d 884, 885 [1978]). Under the State Finance Law, respondent issimilarly authorized to investigate violations of section 189, which imposes civil liability forsubmitting false statements or claims to the state or to local governments (see StateFinance Law § 190; 13 NYCRR 400.2 [a]).[FN1]Accordingly, the subpoena was issued pursuant to legitimate authority. The subpoena beingchallenged herein seeks information relating to work for local governments performed bypetitioner or his law firms and the compensation each received in exchange for such work, aswell as information related to petitioner's retirement benefits. It is therefore relevant to thepotential violations under investigation and ascertaining the amount of benefits improperlyreceived, if any.
Finally, we find that respondent provided an adequate factual predicate upon which to focusthis inquisitorial action upon petitioner. Respondent provided an attorney affirmation relatinginformation volunteered from a confidential informant who had worked for petitioner's formerlaw firm. That information indicated that much of petitioner's work for local governments wasactually performed by other members of the law firm in the same manner as work was performedfor other clients of the firm.[FN2]However, the firm received petitioner's [*3]salaries from thelocal governments, rather than payment for traditional retainers or billable hours, indicating thatpetitioner did not receive such salaries as an individual employee of the local governments.
Respondent enjoys a presumption that he is proceeding in good faith (seeAnheuser-Busch, Inc. v Abrams, 71 NY2d at 332; Matter of Pharmaceutical Socy. ofState of N.Y. v Abrams, 132 AD2d 129, 133 [1987]). "[A] motion to quash . . .raises only the issues of the authority of the investigating body and whether the inquiry fallswithin the scope of that authority" (Matter of Nicholson v State Commn. on Jud.Conduct, 50 NY2d 597, 610 [1980]) and, to be sustained, respondent "need only make apreliminary showing that the information sought is reasonably related to a proper subject ofinquiry" (id. at 611). Information supplied by the confidential informant, whose identityrespondent offered to disclose in camera to Supreme Court and whose general premise petitionerdoes not contest, was a sufficient basis upon which to proceed given the preliminary stage of theinvestigation into petitioner's receipt of retirement benefits (see Matter of American DentalCoop. v Attorney-General of State of N.Y., 127 AD2d 274, 280 [1987]; Matter ofNational Freelancers v State Tax Commn., Dept. of Taxation & Fin., 126 AD2d 218,221-222 [1987], lv denied 70 NY2d 602 [1987], appeal dismissed 70 NY2d 795[1987]).
We have reviewed petitioner's remaining contentions and found them to be without merit.
Rose, J.P., Kane, Stein and Garry, JJ., concur. Ordered that the order is affirmed, withoutcosts.
Footnote 1: Given respondent's clearauthority to issue the subpoena pursuant to Executive Law § 63 (12), we need not addresspetitioner's claims regarding retroactivity and the statute of limitations under the False ClaimsAct at this time.
Footnote 2: Respondent's affidavit alsopointed out that similar allegations survived motions to dismiss in litigation arising from thedissolution of petitioner's former law firm (see Featherstonhaugh v Roemer, 279 AD2d783, 783 [2001]; Featherstonhaugh v Roemer, 274 AD2d 646, 647 [2000]).