Schell v. New York State Bd. of Pharmacy, 64 N.Y.2d 983 (1985)
When the Commissioner of Health imposes a fine under Public Health Law § 12, the four-month statute of limitations in CPLR 217 applies to Article 78 proceedings challenging the fine, not the 60-day period in Public Health Law § 3394(2), which applies only to license revocations or limitations.
Summary
Schell, a pharmacist, was fined $12,000 for record-keeping violations and inventory shortages under Public Health Law article 33. He filed an Article 78 petition to challenge the fine, but the Appellate Division dismissed it as untimely under the 60-day statute of limitations in Public Health Law § 3394(2). The Court of Appeals reversed, holding that § 3394(2) applies only to license revocations or limitations, not to fines imposed under Public Health Law § 12. The court held that the applicable statute of limitations was the four-month period under CPLR 217, making Schell’s petition timely, and remitted the case for consideration on its merits.
Facts
Schell owned and operated Schell’s Red Cross Pharmacy in Amsterdam, NY.
The New York State Board of Pharmacy fined Schell $12,000 for alleged violations of Public Health Law article 33, specifically faulty record-keeping and unexplained inventory shortages of controlled substances.
There was no finding that Schell was trafficking controlled substances.
Procedural History
Schell filed a petition under CPLR Article 78 to review the Commissioner’s determination.
The Appellate Division dismissed the petition solely on the ground that it was not commenced within the 60-day limitations period prescribed by Public Health Law § 3394(2).
Schell appealed to the New York Court of Appeals.
Issue(s)
Whether the 60-day statute of limitations in Public Health Law § 3394(2) applies to an Article 78 proceeding challenging a fine imposed for violations of Public Health Law article 33, where the proceeding does not involve the revocation or limitation of a license.
Holding
No, because Public Health Law § 3394(2) applies only to administrative proceedings directed toward the revocation or limitation of a license, and not to the imposition of a fine under Public Health Law § 12.
Court’s Reasoning
The Court of Appeals reasoned that Public Health Law § 3394(2) is part of a group of statutes governing license revocations, and its applicability is limited to actions affecting a “person whose license, certificate, right or privilege is affected.”
The court distinguished the imposition of a fine from the impairment of a “right or privilege” related to a license.
The court noted that the Commissioner expressly invoked authority under Public Health Law § 12 in ordering the payment of a fine, which made the procedural rules of Public Health Law § 12-a applicable. Since Section 12-a does not have its own limitations period, CPLR 217’s four-month period applies.
The court stated: “Inasmuch as this was clearly an administrative proceeding to impose a fine, the Commissioner’s authority was derived from Public Health Law § 12, and the governing procedural rules, if any, must be found in the related prescriptions of Public Health Law § 12-a.”
The court also pointed out that the fine exceeded the $10,000 limit permissible under Public Health Law § 3391(4), which the Appellate Division relied on, thus further illustrating the error in applying that section.
Because the proceeding was commenced within four months, it was timely and should not have been dismissed. Therefore, the case was remitted to the Appellate Division for consideration of the petition on its merits.